EXHIBIT 99.3
EXECUTION COPY
MSDWCC HELOC TRUST 2003-1
Issuer
and
XXXXX FARGO BANK MINNESOTA, N.A.
Indenture Trustee
INDENTURE
Dated as of May 1, 2003
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HELOC ASSET-BACKED NOTES
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Table of Contents
Page
ARTICLE I.
Definitions
Section 1.01. Definitions. ...................................................................................... 2
Section 1.02. Incorporation by Reference of Trust Indenture Act. ............................................... 2
Section 1.03. Rules of Construction.............................................................................. 2
ARTICLE II.
Original Issuance of Notes
Section 2.01. Form. ............................................................................................ 4
Section 2.02. Execution, Authentication and Delivery. .......................................................... 4
ARTICLE III.
Covenants
Section 3.01. Collection of Payments with respect to the Home Equity Loans. .................................... 5
Section 3.02. Maintenance of Office or Agency. ................................................................. 5
Section 3.03. Money for Payments to Be Held in Trust; Paying Agent. ............................................ 5
Section 3.04. Existence. ........................................................................................ 6
Section 3.05. Payment of Principal and Interest; Defaulted Interest.............................................. 7
Section 3.06. Protection of Trust Estate......................................................................... 9
Section 3.07. Opinions as to Trust Estate........................................................................ 9
Section 3.08. Performance of Obligations; Servicing Agreement....................................................10
Section 3.09. Negative Covenants. ...............................................................................10
Section 3.10. Annual Statement as to Compliance. ...............................................................11
Section 3.11. Recording of Assignments. ........................................................................11
Section 3.12. Representations and Warranties Concerning the Home Equity Loans....................................11
Section 3.13. Assignee of Record of the Home Equity Loans. .....................................................12
Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee. ............................................13
Section 3.15. Investment Company Act. ..........................................................................13
Section 3.16. Issuer May Consolidate, etc. ......................................................................13
Section 3.17. Successor or Transferee. ..........................................................................15
Section 3.18. No Other Business. ...............................................................................15
Section 3.19. No Borrowing. ....................................................................................15
Section 3.20. Guarantees, Loans, Advances and Other Liabilities. ...............................................15
Section 3.21. Capital Expenditures. ............................................................................15
Section 3.22. Owner Trustee Not Liable for Certificates or Related Documents.....................................16
Section 3.23. Restricted Payments. .............................................................................16
Section 3.24. Notice of Events of Default. .....................................................................16
Section 3.25. Further Instruments and Acts. .....................................................................16
Section 3.26. Statements to Noteholders. .......................................................................16
Section 3.27. Determination of Note Rate. .......................................................................16
Section 3.28. Claims under the Credit Enhancement Instrument.....................................................17
Section 3.29. Treatment of the Notes as Debt for All Purposes. .................................................18
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Section 3.30. Rights in Respect of Insolvency Proceedings........................................................18
Section 3.31. Effect of Payments by the Credit Enhancer: Subrogation.............................................19
Section 3.32. Protection of Trust Estate. ......................................................................19
ARTICLE IV.
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes. .......................................................................................21
Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes; Appointment of
Certificate Registrar. ...........................................................................21
Section 4.03. Xxxxxxxxx, Xxxxxxxxx, Lost or Stolen Notes. .......................................................23
Section 4.04. Persons Deemed Owners. ............................................................................23
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. ...................................................................................25
Section 4.10. Satisfaction and Discharge of Indenture. .........................................................25
Section 4.11. Application of Trust Money. ......................................................................26
Section 4.12. Reserved...........................................................................................26
Section 4.13. Repayment of Monies Held by Paying Agent. ........................................................26
Section 4.14. Temporary Notes. .................................................................................27
ARTICLE V.
Default and Remedies
Section 5.01. Events of Default. ...............................................................................28
Section 5.02. Acceleration of Maturity; Rescission and Annulment. ...............................................28
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..........................29
Section 5.04. Remedies; Priorities...............................................................................31
Section 5.05. Optional Preservation of the Trust Estate. .......................................................32
Section 5.06. Limitation of Suits. .............................................................................32
Section 5.07. Unconditional Rights of Noteholders to Receive Principal and Interest. ...........................33
Section 5.08. Restoration of Rights and Remedies. ...............................................................33
Section 5.09. Rights and Remedies Cumulative. ...................................................................33
Section 5.10. Delay or Omission Not a Waiver. ...................................................................33
Section 5.11. Control by Credit Enhancer or Noteholders. .......................................................33
Section 5.12. Waiver of Past Defaults. .........................................................................34
Section 5.13. Undertaking for Costs. ............................................................................34
Section 5.14. Waiver of Stay or Extension Laws. ................................................................35
Section 5.15. Sale of Trust Estate. .............................................................................35
Section 5.16. Action on Notes. .................................................................................36
Section 5.17. Performance and Enforcement of Certain Obligations.................................................37
ARTICLE VI.
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee........................................................................38
Section 6.02. Rights of Indenture Trustee. ......................................................................39
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Section 6.03. Individual Rights of Indenture Trustee. ..........................................................39
Section 6.04. Indenture Trustee's Disclaimer. ..................................................................39
Section 6.05. Notice of Event of Default. ......................................................................39
Section 6.06. Reports by Indenture Trustee to Holders. ..........................................................40
Section 6.07. Tax. .............................................................................................40
Section 6.08. Compensation and Indemnity. .......................................................................40
Section 6.09. Replacement of Indenture Trustee. ................................................................41
Section 6.10. Successor Indenture Trustee by Merger. ...........................................................42
Section 6.11. Appointment of Co-Indenture Trustee or Separate Indenture Trustee..................................42
Section 6.12. Eligibility; Disqualification. ...................................................................43
Section 6.13. Preferential Collection of Claims Against Issuer. ................................................43
Section 6.14. Representations and Warranties. ..................................................................43
Section 6.15. Directions to Indenture Trustee. .................................................................44
Section 6.16. Indenture Trustee May Own Securities. ............................................................44
Section 6.17. Other Capacities of Indenture Trustee. .........................................................44
ARTICLE VII.
Noteholders' Lists and Reports
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. ..........................45
Section 7.02. Preservation of Information; Communications to Noteholders.........................................45
Section 7.03. Reports by Issuer. ................................................................................47
Section 7.04. Reports by Indenture Trustee. .....................................................................47
ARTICLE VIII.
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. .............................................................................48
Section 8.02. Trust Accounts. ...................................................................................48
Section 8.03. Officer's Certificate. ............................................................................48
Section 8.04. Mandatory Auction; Termination Upon Distribution to Noteholders....................................49
Section 8.05. Release of Trust Estate............................................................................50
Section 8.06. Surrender of Notes Upon Final Payment. ...........................................................50
ARTICLE IX.
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders.............................................51
Section 9.02. Supplemental Indentures With Consent of Noteholders. .............................................52
Section 9.03. Execution of Supplemental Indentures. ............................................................53
Section 9.04. Effect of Supplemental Indenture. ................................................................54
Section 9.05. Conformity with Trust Indenture Act. .............................................................54
Section 9.06. Reference in Notes to Supplemental Indentures. ....................................................54
ARTICLE X.
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc.........................................................55
Section 10.02. Form of Documents Delivered to Indenture Trustee. ................................................55
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Section 10.03. Acts of Noteholders...............................................................................56
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer and Rating Agencies. ...............57
Section 10.05. Notices to Noteholders; Waiver. .................................................................57
Section 10.05. ..................................................................................................57
Section 10.06. Alternate Payment and Notice Provisions. .........................................................58
Section 10.07. Conflict with Trust Indenture Act. ..............................................................58
Section 10.08. Effect of Headings. .............................................................................58
Section 10.09. Successors and Assigns. .........................................................................58
Section 10.10. Separability. ...................................................................................58
Section 10.11. Benefits of Indenture. ..........................................................................58
Section 10.12. Legal Holidays. .................................................................................59
Section 10.13. GOVERNING LAW. ..................................................................................59
Section 10.14. Counterparts. ...................................................................................59
Section 10.15. Recording of Indenture. .........................................................................59
Section 10.16. Issuer Obligation. ..............................................................................59
Section 10.17. No Petition. ....................................................................................59
Section 10.18. Inspection. .....................................................................................60
Section 10.19. Rights of the Credit Enhancer to Exercise Rights of Noteholder. .................................60
Section 10.20. Third-Party Beneficiary. ........................................................................60
EXHIBITS
Exhibit A - Form of Notes
Exhibit B - Form of Indenture Trustee Certification
Exhibit C - Form of Servicer Certification
Appendix A Definitions
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EXECUTION COPY
This Indenture, dated as of May 1, 2003, between MSDWCC HELOC TRUST
2003-1, a Delaware statutory trust, as Issuer (the "Issuer"), and XXXXX FARGO
BANK MINNESOTA, N.A., a national banking association, as Indenture Trustee
(the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
Series 2003-1 Home Equity Loan-Backed Notes (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created (a) the Home Equity Loans; (b) all funds, cash, money and investment
property on deposit from time to time in, or credited from time to time to the
Collection Account, the Certificate Distribution Account, the Payment Account
and in all proceeds thereof; (c) the Credit Enhancement Instrument; (d) all
insurance policies, including the right to payments thereunder, with respect
to the Home Equity Loans required to be maintained pursuant to the Servicing
Agreement and to be serviced by the Servicer; (e) 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, investment
property and other property which at any time constitute all or part of or are
included in the proceeds of any of the foregoing; (f) all rights of the
Seller/Servicer under the Insurance Policy as described in Section 2.1(a) of
the Home Equity Loan Purchase Agreement and (g) all of the Depositor's right,
title and interest under the Home Equity Loan Purchase Agreement
(collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The foregoing Grant shall inure to the benefit of the Credit
Enhancer in respect of draws made on the Credit Enhancement Instrument and
amounts owing from time to time pursuant to the Insurance Agreement
(regardless of whether such amounts relate to the Notes), and such Grant shall
continue in full force and effect for the benefit of the Credit Enhancer until
all such amounts owing to it have been repaid in full.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I.
Definitions
Section 1.01. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions attached hereto as Appendix A which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act (the "TIA"),
the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by
Commission rule have the meaning assigned to them by such
definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as
in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the plural
include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of
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agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
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ARTICLE II.
Original Issuance of Notes
Section 2.01. Form. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit A, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by
the Authorized Officers executing such Notes, as evidenced by their execution
of the Notes. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes,
as evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibit A are part of the terms
of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Notes for original issue in an aggregate initial principal amount of
$483,155,000.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes and shall be issuable in the minimum
initial Security Balances of $1,000 and in integral multiples of $1 in excess
thereof, except for one Note, evidencing the sum of an authorized denomination
thereof and the remainder of the aggregate Security Balance of the Notes.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated
and delivered hereunder.
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ARTICLE III.
Covenants
Section 3.01. Collection of Payments with respect to the Home Equity
Loans. The Indenture Trustee shall establish and maintain with itself the
Payment Account in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Servicer,
each remittance received by the Indenture Trustee with respect to the Home
Equity Loans. The Indenture Trustee shall make all payments of principal of
and interest on the Notes, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Payment Account.
Section 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the City of New York, an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Indenture Trustee's Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands at the Indenture
Trustee's Corporate Trust Office.
Section 3.03. Money for Payments to Be Held in Trust; Paying Agent. As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment
Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Payment Account for payments of Notes shall be paid over to the Issuer except
as provided in this Section 3.03. The Issuer hereby appoints the Indenture
Trustee as the initial Paying Agent hereunder. The Indenture Trustee hereby
accepts such appointment.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee and the Credit Enhancer written
notice of any default by the Issuer of which it has actual knowledge in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
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(iv) immediately resign as Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of Notes,
if at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith; and
(vi) deliver to the Indenture Trustee a copy of the report to
Noteholders prepared with respect to each Payment Date by the Servicer
pursuant to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Request direct any Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
one year after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however,
that the Indenture Trustee or such Paying Agent, before being required to make
any such repayment, shall at the expense and direction of the Issuer cause to
be published once, in an Authorized Newspaper, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Issuer. The Indenture Trustee may
also adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called
but have not been surrendered for redemption or whose right to or interest in
monies due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for
each such Holder).
Section 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Home Equity Loans and each
other instrument or agreement included in the Trust Estate.
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Section 3.05. Payment of Principal and Interest; Defaulted Interest.
(a) On each Payment Date from Investor P&I Collections on deposit in
the Payment Account, the Paying Agent shall pay to the Noteholders, the
Certificate Paying Agent, on behalf of the Certificateholders, and to other
Persons the amounts to which they are entitled, as set forth below in the
following order of priority:
(i) sequentially to (A) concurrently (I) the Indenture Trustee,
payment or reimbursement of any amounts owing to it pursuant to this
Indenture, including but not limited to Section 6.08, and pursuant to the
Servicing Agreement, including but not limited to Section 7.02, subject to a
$100,000 cap per annum for such Payment Date and no more than $20,000 on any
Payment Date and (II) the Owner Trustee, its fee for services rendered
pursuant to the Trust Agreement, for such Payment Date, and (B) the Servicer,
payment of any amounts owing to it pursuant to Section 6.03 of the Servicing
Agreement, subject to a $50,000 cap per annum;
(ii) to the Credit Enhancer, the Premium for the Credit
Enhancement Instrument (as set forth in the Premium Letter) and any such
Premium remaining unpaid for any prior Payment Date (with interest thereon as
provided in the Insurance Agreement) for such Payment Date;
(iii) to the Noteholders, interest accrued during the related
Interest Period at the Note Rate on the Security Balance of the Notes
immediately prior to such Payment Date, other than Interest Shortfalls;
(iv) to the Noteholders, principal equal to the Principal
Collection Distribution Amount for such Payment Date less the Principal
Reduction Amount for such Payment Date;
(v) to the Noteholders, an amount equal to (A) the Investor
Liquidation Loss Amounts on such Payment Date, plus (B) any Investor
Liquidation Loss Amounts remaining undistributed from any preceding Payment
Date, provided that any Investor Liquidation Loss Amount shall not be required
to be paid to the extent that such Investor Liquidation Loss Amount was paid
on the Notes by means of a draw on the Credit Enhancement Instrument;
(vi) to the Credit Enhancer, reimbursement for prior draws made
under the Credit Enhancement Instrument and any other amounts owed to the
Credit Enhancer pursuant to the Insurance Agreement (with interest thereon as
provided in the Insurance Agreement);
(vii) to the Noteholders, an amount equal to the
Overcollateralization Deficit for such Payment Date;
(viii) to the Noteholders, principal in the amount of the
Accelerated Principal Payment Amount for such Payment Date;
(ix) to the Servicer, payment of any amounts owing to it
pursuant to Section 6.03 of the Servicing Agreement, not subject to a per
annum cap;
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(x) to the Noteholders, an amount equal to Interest Shortfalls
not previously paid (together with interest thereon at the Note Rate, to the
extent permitted by law);
(xi) to the Indenture Trustee for any other amounts owing it
pursuant to this Indenture, including but not limited to Section 6.08 hereof,
and the Servicing Agreement, including but not limited to, Section 7.02
thereof, and remaining unpaid after the payment of amounts under Section
3.05(a)(i) above or to the Owner Trustee for any other expenses due it under
the Trust Agreement; and
(xii) any remaining amount, including any Seller P&I
Collections, to the Certificate Paying Agent, on behalf of the holders of the
Certificates;
provided, however, that on the Final Scheduled Payment Date or other final
Payment Date, the amount to be paid pursuant to clause (iv) above shall be
equal to the Security Balances of the Notes immediately prior to such Payment
Date. For purposes of the foregoing, required payments of principal on the
Notes on each Payment Date will include the Investor Liquidation Loss Amounts
for such Payment Date and for all previous Collection Periods until paid or
covered in full, to the extent not otherwise covered by a Liquidation Loss
Distribution Amount, a reduction of the Overcollateralization Amount or a draw
on the Credit Enhancement Instrument (up to the outstanding Security Balance
thereof).
On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholders.
The amounts paid to Noteholders shall be paid in accordance with the
applicable percentage as set forth in paragraph (b) below. Interest will
accrue on the Notes during an Interest Period on the basis of the actual
number of days in such Interest Period and a year assumed to consist of 360
days.
Any installment of interest or principal, if any, payable on any
Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to each Holder of record on the
preceding Record Date, by wire transfer to an account specified in writing by
such Holder reasonably satisfactory to the Indenture Trustee as of the
preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Noteholder mailed to
such Holder's address as it appears in the Note Register the amount required
to be distributed to such Holder on such Payment Date pursuant to such
Holder's Securities; provided, however, that the Indenture Trustee shall not
pay to such Holders any amount required to be withheld from a payment to such
Holder by the Code.
(b) The principal of each Note shall be due and payable in full on
the Final Scheduled Payment Date for such Note as provided in the related form
of Note set forth in Exhibit A. All principal payments of each of the Notes
shall be made to the Noteholders entitled thereto in accordance with the
Percentage Interests represented by such Notes. Upon written notice to the
Indenture Trustee by the Issuer, the Indenture Trustee shall notify the Person
in whose name a Note is registered at the close of business on the Record Date
preceding the Final Scheduled Payment Date or other final Payment Date. Such
notice shall be mailed no later than five Business Days prior to such Final
Scheduled Payment Date or other final Payment Date and shall specify that
payment of the principal amount and any interest due with respect to such Note
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at the Final Scheduled Payment Date or other final Payment Date will be
payable only upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for such final
payment.
Section 3.06. Protection of Trust Estate.
(a) The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) cause the Trust to enforce any of the Home Equity Loans;
or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of
money or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which
it was held as described in the Opinion of Counsel delivered at the Closing
Date pursuant to Section 3.07(a), if no Opinion of Counsel has yet been
delivered pursuant to Section 3.07(b)) unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the Lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute (if required) and cause the Servicer to file any
financing statement, continuation statement or other instrument required to be
executed pursuant to this Section 3.06.
Section 3.07. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, the Credit Enhancer and the Owner Trustee an Opinion of Counsel at
the expense of the Issuer either stating that, in the opinion of such counsel,
such action has been taken with respect to the recording and filing of this
Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the lien and security interest in the Home Equity Loans and reciting
the details of such action, or stating that, in the opinion of such counsel,
no such action is necessary to make such lien and security interest effective.
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(b) On or before May 31st in each calendar year, beginning in 2004,
the Issuer shall furnish to the Indenture Trustee and the Credit Enhancer an
Opinion of Counsel at the expense of the Issuer either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution (if required) and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest in the Home Equity Loans and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the
execution (if required) and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Home Equity Loans until
December 31 in the following calendar year.
Section 3.08. Performance of Obligations; Servicing Agreement.
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Home
Equity Loans or under any instrument included in the Trust Estate, or which
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any of the documents
relating to the Home Equity Loans or any such instrument, except such actions
as the Servicer is expressly permitted to take pursuant to the Servicing
Agreement.
(d) The Issuer may retain an administrator and may enter into
contracts with other Persons for the performance of the Issuer's obligations
hereunder, and performance of such obligations by such Persons shall be deemed
to be performance of such obligations by the Issuer.
Section 3.09. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of the Trust Estate, unless directed
to do so by the Indenture Trustee or the Credit Enhancer pursuant to Section
5.04 or 8.05 hereof or as may be permitted or required pursuant to the
Servicing Agreement or the Home Equity Loan Purchase Agreement;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than amounts
properly withheld from such 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;
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(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to
be released from any covenants or obligations with respect to the Notes under
this Indenture except as may be expressly permitted hereby, (B) permit any
lien, charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof or (C) permit the lien of this
Indenture not to constitute a valid first priority security interest in the
Trust Estate; or
(iv) impair or cause to be impaired the Issuer's interest in
the Home Equity Loans, the Home Equity Loan Purchase Agreement or in any Basic
Document, if any such action would materially and adversely affect the
interests of the Noteholders or the Credit Enhancer.
Section 3.10. Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee and the Credit Enhancer, within 120 days after the
end of each fiscal year (which currently ends November 30) of the Issuer
(commencing with the fiscal year 2003), an Officer's Certificate stating, as
to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture and the Trust Agreement has been
made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and covenants
under this Indenture and the provisions of the Trust Agreement throughout such
year, or, if there has been a default in its compliance with any such
condition or covenant, specifying each such default known to such Authorized
Officer and the nature and status thereof.
Section 3.11. Recording of Assignments. The Issuer shall enforce the
obligation of the Seller under the Home Equity Loan Purchase Agreement to
submit or cause to be submitted for recording all Assignments of Mortgages to
the extent required by the Home Equity Loan Purchase Agreement.
Section 3.12. Representations and Warranties Concerning the Home Equity
Loans.
(a) The Indenture Trustee, as pledgee of the Home Equity Loans, has
the benefit of the representations and warranties made by the Seller in
Section 3.1(a) and Section 3.1(b) of the Home Equity Loan Purchase Agreement
concerning the Home Equity Loans and the right to enforce the remedies against
the Seller provided in such Section 3.1(a) or Section 3.1(b) to the same
extent as though such representations and warranties were made directly to the
Indenture Trustee.
(b) The Issuer hereby makes the following representations and
warranties with respect to the Home Equity Loans:
(i) The Issuer represents and warrants that the Indenture
creates a valid and continuing security interest (as defined in the UCC in the
Home Equity Loans in favor of the
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Noteholders, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from the Issuer.
(ii) The Issuer represents and warrants that the Home Equity
Loans constitute "instruments" within the meaning of the UCC.
(iii) The Issuer represents and warrants that the Issuer owns
and has good and marketable title to the Home Equity Loans free and clear of
any Lien, claim or encumbrance of any Person.
(iv) The Issuer represents and warrants that the Issuer has
caused or will have caused, on or prior to the Closing Date, the filing of all
appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the
security interest in the Home Equity Loans granted to the Noteholders
hereunder.
(v) The Issuer represents and warrants that other than the
security interest granted to the Noteholders pursuant to this Agreement, the
Issuer has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Home Equity Loans. The Issuer has not authorized
the filing of and is not aware of any financing statements against the Issuer
that include a description of collateral covering the Home Equity Loans other
than any financing statement relating to the security interest granted to the
Noteholders hereunder or that has been terminated. The Issuer is not aware of
any judgment or tax lien filings against the Issuer.
(vi) The Issuer represents and warrants that the Issuer has in
its possession all original copies of the security certificates that
constitute or evidence the Home Equity Loans. The security certificates that
constitute or evidence the Home Equity Loans do not have any marks or
notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Noteholders. All financing statements
filed or to be filed against the Issuer in favor of the Noteholders in
connection herewith describing the Home Equity Loans contain a statement to
the following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the
Noteholders."
Section 3.13. Assignee of Record of the Home Equity Loans. As pledgee of
the Home Equity Loans, the Indenture Trustee may, upon the occurrence of
certain events, hold record title to the Home Equity Loans by being named as
payee in the endorsements of the Mortgage Notes and assignee in the
Assignments of Mortgage as provided under Section 2.1 of the Home Equity Loan
Purchase Agreement. Except as expressly provided in the Home Equity Loan
Purchase Agreement or in the Servicing Agreement with respect to any specific
Home Equity Loan, the Indenture Trustee shall not execute any endorsement or
assignment or otherwise release or transfer such record title to any of the
Home Equity Loans until such time as the remaining Trust Estate may be
released pursuant to Section 8.05(b).
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Section 3.14. Servicer as Agent and Bailee of the Indenture Trustee.
Solely for purposes of perfection under Section 9-305 of the UCC or other
similar applicable law, rule or regulation of the state in which such property
is held by the Servicer, the Issuer and the Indenture Trustee hereby
acknowledge that the Servicer is acting as agent and bailee of the Indenture
Trustee in holding amounts on deposit in the Collection Account pursuant to
Section 3.02 of the Servicing Agreement that are allocable to the Home Equity
Loans, as well as the agent and bailee of the Indenture Trustee in holding any
Related Documents released to the Servicer pursuant to Section 3.06(b) of the
Servicing Agreement, and any other items constituting a part of the Trust
Estate which from time to time come into the possession of the Servicer. It is
intended that, by the Servicer's acceptance of such agency pursuant to Section
3.02 of the Servicing Agreement, the Indenture Trustee, as a pledgee of the
Home Equity Loans, will be deemed to have possession of such Related
Documents, such monies and such other items for purposes of Section 9-305 of
the UCC of the state in which such property is held by the Servicer.
Section 3.15. Investment Company Act. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section
3.15 if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions
imposed in such order.
Section 3.16. Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless the Credit Enhancer consents thereto and:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state or the
District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form reasonably
satisfactory to the Indenture Trustee and the Credit Enhancer, the due and
punctual payment of the principal of and interest on all Notes and to the
Certificate Paying Agent, on behalf of the Certificateholders and the
performance or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the Issuer receives prior written consent of the Credit
Enhancer and the Rating Agencies shall have notified the Issuer that such
transaction shall not cause the rating of the Notes or the Certificates to be
reduced, suspended or withdrawn or to be considered by either Rating Agency to
be below investment grade without taking into account the Credit Enhancement
Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the Credit
Enhancer as addressees thereof)
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to the effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
and the Credit Enhancer an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation or merger and such supplemental indenture
comply with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any filing
required by the Exchange Act).
(b) Except as otherwise provided in the Servicing Agreement or the
Home Equity Loan Purchase Agreement, the Issuer shall not convey or transfer
any of its properties or assets, including those included in the Trust Estate,
to any Person, unless the Credit Enhancer consents to such conveyance or
transfer and:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person organized
and existing under the laws of the United States of America or any state, (B)
expressly assumes, by an indenture supplemental hereto, executed and delivered
to the Indenture Trustee, in form satisfactory to the Indenture Trustee and
the Credit Enhancer, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of Holders of the
Notes, (D) unless otherwise provided in such supplemental indenture, expressly
agrees to indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture and the
Notes and (E) expressly agrees by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person) required by
the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Issuer receives consent of the Credit Enhancer and
the Rating Agencies shall have notified the Issuer that such transaction shall
not cause the rating of the Notes or the Certificates to be reduced, suspended
or withdrawn, if determined without regard to the Credit Enhancement
Instrument;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee and the Credit
Enhancer as addressees thereof) to the effect that such transaction will not
have any material adverse tax consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
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(vi) the Issuer shall have delivered to the Indenture Trustee
and the Credit Enhancer an Officer's Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such supplemental indenture
comply with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any filing
required by the Exchange Act).
Section 3.17. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.16(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture
with the same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.16(b), the Issuer will be released from
every covenant and agreement of this Indenture to be observed or performed on
the part of the Issuer with respect to the Notes immediately upon the delivery
of written notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Home Equity Loans and the issuance of the Notes and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.19. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.20. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or
acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
Section 3.21. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein shall be taken as the statements of
the Depositor, and the Owner Trustee assumes no responsibility for the
correctness thereof. The Owner Trustee and the Indenture Trustee make no
representations as to the validity or sufficiency of this Indenture, of any
Basic Document or of the Certificates (other than the signatures of the Owner
Trustee on the Certificates) or the Notes, or of any Related Documents. The
Owner Trustee and the Indenture Trustee shall at no time have any
responsibility or liability with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under the Trust Agreement or the Noteholders under this
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document
15
or in any related document or the accuracy of any such warranty or
representation, or any action of the Certificate Paying Agent, the Certificate
Registrar or the Indenture Trustee taken in the name of the Owner Trustee.
Section 3.23. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii)
set aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Issuer may make, or cause to be made, (x) distributions to
the Owner Trustee and the Certificateholders as contemplated by, and to the
extent funds are available for such purpose under the Trust Agreement and (y)
payments to the Servicer pursuant to the terms of the Servicing Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
Section 3.24. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Credit Enhancer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.
Section 3.25. Further Instruments and Acts. Upon request of the Indenture
Trustee or the Credit Enhancer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
Section 3.26. Statements to Noteholders. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall make available to DTC,
the Rating Agencies, the Issuer, the Depositor, the Servicer, the Credit
Enhancer, each Noteholder and Certificateholder, respectively, the Statement
prepared by the Indenture Trustee and based on the Servicing Reports provided
to the Indenture Trustee by the Servicer pursuant to Section 4.01 of the
Servicing Agreement.
The Indenture Trustee will make the Statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Noteholders, and other parties described in the
preceding paragraph via the Indenture Trustee's internet website. The
Indenture Trustee's internet website shall initially be located at
"xxx.xxxxxxx.xxx". Assistance in using the website can be obtained by calling
the Indenture Trustee's customer service desk at (000) 000-0000. Parties that
are unable to use the above distribution option are entitled to have a paper
copy mailed to them via first class mail by calling the customer service desk
and indicating such. The Indenture Trustee shall have the right to change the
way the Statement is distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Indenture
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.
Section 3.27. Determination of Note Rate. On the second LIBOR Business
Day immediately preceding (i) the Closing Date in the case of the first
Interest Period and (ii) the first day of each succeeding Interest Period, the
Indenture Trustee shall determine LIBOR and the Note Rate for such Interest
Period and shall provide the Issuer, the Servicer and the Depositor
16
with the rates of LIBOR and the Note Rate by making such rates available on
the Indenture Trustee's internet website, as set forth in Section 3.26.
Section 3.28. Claims under the Credit Enhancement Instrument.
(a) If, on the 2nd Business Day prior to the related Payment Date
there is not on deposit with the Indenture Trustee funds sufficient to make
Scheduled Payments on the Notes due on such Payment Date, the Indenture
Trustee shall give notice to the Credit Enhancer by telephone or telecopy of
the amount of such deficiency by 12:00 noon, New York City time, on such
Business Day in the form set forth as Exhibit A of the Credit Enhancement
Instrument to the Credit Enhancer and the Fiscal Agent.
(b) At the time of the execution and delivery of this Indenture, and
for the purposes of this Indenture, the Indenture Trustee shall establish a
separate special purpose trust account for the benefit of Holders of the Notes
referred to herein as the "Policy Payments Account" and over which the
Indenture Trustee shall have exclusive control and sole right of withdrawal.
The Indenture Trustee shall deposit any amount paid under the Credit
Enhancement Instrument in the Policy Payments Account and distribute such
amount only for purposes of making the Insured Payments for which a claim was
made. Such amounts shall be disbursed by the Indenture Trustee to Holders in
the same manner as principal and interest payments are to be made with respect
to the Notes under Section 3.05 hereof. It shall not be necessary for such
payments to be made by checks or wire transfers separate from the check or
wire transfer used to pay Insured Payments with other funds available to make
such payments. However, the amount of any payment of principal of or interest
on the Notes to be paid from the Policy Payments Account shall be noted as
provided in (d) below in the Statement to the Noteholders to be furnished to
Holders of the Notes. Funds held in the Policy Payments Account shall not be
invested by the Indenture Trustee.
(c) Any funds received by the Indenture Trustee as a result of any
claim under the Credit Enhancement Instrument shall be applied by the
Indenture Trustee, together with the funds, if any, to be withdrawn from the
Payment Account, directly to the payment in full of the Insured Payments due
on the Notes (including Notes held for the Indenture Trustee's own account).
Funds received by the Indenture Trustee as a result of any claim under the
Credit Enhancement Instrument shall be deposited by the Indenture Trustee in
the Policy Payments Account and used solely for payment to the Holders of
Notes and may not be applied to satisfy any costs, expenses or liabilities of
the Indenture Trustee. Any funds remaining in the Policy Payments Account
following a Payment Date shall promptly be remitted to the Credit Enhancer.
(d) The Indenture Trustee shall keep a complete and accurate record
of all funds deposited by the Credit Enhancer into the Policy Payments Account
and the allocation of such funds to payment of interest on and principal paid
in respect of any Note. The Credit Enhancer shall have the right to inspect
such records at reasonable times upon one Business Day's prior notice to the
Indenture Trustee.
(e) Subject to and conditioned upon payment of any interest or
principal with respect to the Notes by or on behalf of the Credit Enhancer,
the Indenture Trustee shall assign to the Credit Enhancer, all rights to the
payment of interest or principal on the Indenture which are then due for
payment to the extent of all payments made by the Credit Enhancer and the
Credit Enhancer may exercise any option, vote, right, power or the like with
respect to Obligations to
17
the extent it has made a principal payment pursuant to the Credit Enhancement
Instrument. The Indenture Trustee agrees that the Credit Enhancer shall be
subrogated to all of the rights to payment of the Holders of the Notes or in
relation thereto to the extent that any payment of principal or interest was
made to such Holders with payments made under the Credit Enhancement
Instrument by the Credit Enhancer.
Section 3.29. [Reserved.]
Section 3.30. Rights in Respect of Insolvency Proceedings.
(a) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any scheduled payment of
principal of or interest on a Note has been voided in whole or in part as a
preference payment under applicable bankruptcy law, the Indenture Trustee
shall so notify the Credit Enhancer, shall comply with the provisions of the
Credit Enhancement Instrument to obtain payment by the Credit Enhancer of such
voided scheduled payment, and shall, at the time it provides notice to the
Credit Enhancer, notify, by mail to Holders of the Notes that, in the event
that any Holder's scheduled payment is so recovered, such Holder will be
entitled to payment pursuant to the terms of the Credit Enhancement
Instrument, a copy of which shall be made available through the Indenture
Trustee, the Credit Enhancer or the Fiscal Agent, if any, and the Indenture
Trustee shall furnish to the Credit Enhancer or its Fiscal Agent, if any, its
records evidencing the payments of principal of and interest on the Notes, if
any, which have been made by the Indenture Trustee and subsequently recovered
from Holders, and the dates on which such payments were made.
(b) The Indenture Trustee shall promptly notify the Credit Enhancer
of either of the following as to which it has actual knowledge: (i) the
commencement of any proceeding by or against the Trust commenced under the
United States Bankruptcy Code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding")
described in Section 5.03(d) hereof and (ii) the making of any claim in
connection with any Insolvency Proceeding seeking the avoidance as a
preferential transfer (a "Preference Claim") of any payment of principal of,
or interest on, the Notes. Each Holder, by its purchase of Notes, and the
Indenture Trustee hereby agree that, so long as a Credit Enhancer Default
shall not have occurred and be continuing, Credit Enhancer may at any time
during the continuation of an Insolvency Proceeding direct all matters
relating to such Insolvency Proceeding, including, without limitation, (i) all
matters relating to any Preference Claim, (ii) the direction of any appeal of
any order relating to any Preference Claim at the expense of Credit Enhancer
but subject to reimbursement as provided in the Insurance Agreement and (iii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition, and without limitation of the foregoing, as set forth in
Section 3.31, the Credit Enhancer shall be subrogated to, and each Holder and
the Indenture Trustee hereby delegate and assign, to the fullest extent
permitted by law the rights of the Indenture Trustee and each Holder in the
conduct of any Insolvency Proceeding, including, without limitation, all
rights of any party to an adversary proceeding action with respect to any
court order issued in connection with any such Insolvency Proceedings.
(c) The Indenture Trustee shall furnish to the Credit Enhancer or
its Fiscal Agent its records evidencing the Insured Payments of principal of
and interest on the Notes which have been made by the Indenture Trustee and
subsequently recovered from Noteholders, and the dates on which such payments
were made.
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Section 3.31. Effect of Payments by the Credit Enhancer: Subrogation.
(a) Anything herein to the contrary notwithstanding, any payment
with respect to the principal of or interest on the Notes which is made with
moneys received pursuant to the terms of the Credit Enhancement Instrument
shall not be considered payment by the Issuer of the Notes, shall not
discharge the Issuer in respect of its obligation to make such payment and
shall not result in the payment of or the provision for the payment of the
principal of or interest on the Notes within the meaning of Section 4.10
hereof. The Issuer and the Indenture Trustee acknowledge that without the need
for any further action on the part of the Credit Enhancer, the Issuer, the
Indenture Trustee or the Note Registrar (i) to the extent the Credit Enhancer
makes payments, directly or indirectly, on account of principal of or interest
on the Notes to the Holders of such Notes, the Credit Enhancer will be fully
subrogated to the rights of such Holders to received such principal and
interest from the Issuer, and (ii) the Credit Enhancer shall be paid such
principal and interest in its capacity as a Holder of Notes but only from the
sources and in the manner provided herein for the payment of such principal
and interest in each case only after the Holders of the Notes have received
payment of all scheduled payments of principal and interest due thereon.
(b) Without limiting the provisions of Article V hereof or the
rights or interests of the Holders as otherwise set forth herein, so long as
no Credit Enhancer Default exists, the Indenture Trustee shall cooperate in
all respects with any reasonable request by Credit Enhancer for action to
preserve or enforce Credit Enhancer's rights or interests under this
Indenture, including, without limitation, upon the occurrence and continuance
of an Event of Default, a request to take any one or more of the following
actions:
(i) institute proceedings for the collection of all amounts
then payable on the Notes, or under this Indenture in respect to the
Notes, enforce any judgment obtained and collect from the Issuer
moneys adjudged due:
(ii) institute proceedings from time to time for the complete
or partial foreclosure of this Indenture; and
(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 Credit Enhancer hereunder.
Section 3.32. Protection of Trust Estate. At the request of the Credit
Enhancer (so long as no Credit Enhancer Default exists), the Indenture Trustee
and the Issuer will from time to time execute and deliver all such supplements
and amendments hereto and all such financing statements, continuation
statements, instruments of further assurance and other instruments, and will
take such other action as may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the Lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
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(iv) enforce any of the Related Documents;
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, and of Noteholders in the Related
Documents and the other property held as part of the Trust Estate
against the claims of all persons and parties; or
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
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ARTICLE IV.
The Notes; Satisfaction and Discharge of Indenture
Section 4.01. The Notes. The Notes shall be registered in the name of a
nominee designated by the Depository. Beneficial Owners will hold interests in
the Notes through the book-entry facilities of the Depository in minimum
initial Security Balances of $1,000 and integral multiples of $1 in excess
thereof, except for one Note, evidencing the sum of an authorized denomination
thereof and the remainder of the aggregate Security Balance of the Notes.
The Indenture Trustee and the Credit Enhancer may for all purposes
(including the making of payments due on the Notes) deal with the Depository
as the authorized representative of the Beneficial Owners with respect to the
Notes for the purposes of exercising the rights of Holders of Notes hereunder.
Except as provided in the next succeeding paragraph of this Section 4.01, the
rights of Beneficial Owners with respect to the Notes shall be limited to
those established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the
Notes as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Notes shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Noteholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Note may be transferred by the Depository except to a
successor Depository that agrees to hold such Note for the account of the
Beneficial Owners.
In the event The Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint
a successor Depository. If no successor Depository has been appointed within
30 days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to definitive certificates representing the
Notes it beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the
Issuer by the Owner Trustee, not in its individual capacity but solely as
Owner Trustee, authenticated by the Note Registrar and delivered by the
Indenture Trustee to or upon the order of the Issuer.
Section 4.02. Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar. The Issuer shall cause to be kept
at the Indenture Trustee's Corporate Trust Office a Note Register in which,
subject to such reasonable regulations as it may prescribe, the Note Registrar
shall provide for the registration of Notes and of transfers and exchanges of
Notes as herein provided. The Issuer hereby appoints the Indenture Trustee as
Note Registrar to keep at its Corporate Trust Office a Note Register in which,
subject to such reasonable regulations as it may prescribe, the Note Registrar
shall provide for the registration of Notes and of transfers and exchanges
thereof pursuant to this Section 4.02. The Indenture Trustee hereby accepts
such appointment.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuer shall execute and the
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Note Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes in authorized initial
Security Balances evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes
may be exchanged for other Notes of like tenor, in each case in authorized
initial Security Balances evidencing the same aggregate Percentage Interests
upon surrender of the Notes to be exchanged at the Corporate Trust Office of
the Note Registrar. Whenever any Notes are so surrendered for exchange, the
Issuer shall execute and the Note Registrar shall authenticate and deliver the
Notes which the Noteholder making the exchange is entitled to receive. Each
Note presented or surrendered for registration of transfer or exchange shall
(if so required by the Note Registrar) be duly endorsed by, or be accompanied
by a written instrument of transfer in form reasonably satisfactory to the
Note Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing with such signature guaranteed by a commercial bank or
trust company located or having a correspondent located in the city of New
York. Notes delivered upon any such transfer or exchange will evidence the
same obligations, and will be entitled to the same rights and privileges, as
the Notes surrendered.
Any Noteholder using the assets of (i) an employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) that is subject to the provisions of Title I of
ERISA, (ii) a plan described in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended, or (iii) any entity whose underlying assets include
plan assets by reason of a plan's investment in the entity to purchase the
Notes, or to whom the Notes are transferred, will be deemed to have
represented that the acquisition and continued holding of the Notes do not
constitute or give rise to a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code for which no statutory, regulatory or
administrative exemption is available, and the Indenture Trustee shall be
entitled to conclusively rely upon such representation without any independent
investigation.
In addition, the Notes may not be purchased with the assets of any
plan described in clauses (i), (ii) or (iii) in the immediately preceding
paragraph if the Depositor, the Servicer, the Indenture Trustee, the Owner
Trustee or any of their affiliates (a) has investment or administrative
discretion with respect to such plan assets; (b) has authority or
responsibility to give, or regularly gives, investment advice with respect to
such plan assets, for a fee and pursuant to an agreement or understanding that
such advice (i) will serve as a primary basis for investment decisions with
respect to such plan assets and (ii) will be based on the particular
investment needs for such plan; or (c) is an employer maintaining or
contributing to such plan.
No service charge shall be imposed for any registration of transfer
or exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange
shall be cancelled by the Note Registrar and delivered to the Indenture
Trustee for subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register
pursuant to Section 3.09 of the Trust
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Agreement in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges thereof pursuant to Section 3.05
of the Trust Agreement. The Indenture Trustee hereby accepts such appointment.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same
class; provided, however, that if any such destroyed, lost or stolen Note, but
not a mutilated Note, shall have become or within seven days shall be due and
payable, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note
was delivered or any assignee of such Person, except a bona fide purchaser,
and shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03,
the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Credit Enhancer, the
Indenture Trustee, the Note Registrar and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name any Note is registered
(as of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none
of the Issuer, the Credit Enhancer,
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the Indenture Trustee or any agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
Section 4.05. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this Section
4.05, except as expressly permitted by this Indenture. All cancelled Notes may
be held or disposed of by the Indenture Trustee in accordance with its
standard retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Request that they be destroyed or returned to
it; provided however, that such Issuer Request is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
Section 4.06. Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes,
to be delivered to The Depository Trust Company, the initial Depository, by,
or on behalf of, the Issuer. Such Notes shall initially be registered on the
Note Register in the name of Cede & Co., the nominee of the initial
Depository, and no Beneficial Owner will receive a Definitive Note
representing such Beneficial Owner's interest in such Note, except as provided
in Section 4.08. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Beneficial Owners pursuant to Section
4.08:
(i) the provisions of this Section 4.06 shall be in full force
and effect;
(ii) the Note Registrar, the Indenture Trustee and the Credit
Enhancer shall be entitled to deal with the Depository for all purposes of
this Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the sole
holder of the Notes, and shall have no obligation to the Owners of Notes;
(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of this
Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Depository and shall be limited to those established by law and
agreements between such Owners of Notes and the Depository and/or the
Depository Participants. Unless and until Definitive Notes are issued pursuant
to Section 4.08, the initial Depository will make book-entry transfers among
the Depository Participants and receive and transmit payments of principal of
and interest on the Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Security Balances of the Notes, the Depository
shall be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Beneficial Owners and/or Depository
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such instructions to
the Indenture Trustee.
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Section 4.07. Notices to Depository. Whenever a notice or other
communication to the Note Holders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08. Definitive Notes. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to
terminate the book-entry system through the Depository or (iii) after the
occurrence of an Event of Default, Owners of Notes representing beneficial
interests aggregating at least a majority of the Security Balances of the
Notes advise the Depository in writing that the continuation of a book-entry
system through the Depository is no longer in the best interests of the
Beneficial Owners, then the Depository shall notify all Beneficial Owners and
the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Beneficial Owners requesting the same.
Upon surrender to the Indenture Trustee of the typewritten Notes representing
the Book-Entry Notes by the Depository, accompanied by registration
instructions, the Issuer shall execute and the Note Registrar shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize
the Holders of the Definitive Notes as Noteholders.
Section 4.09. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will
qualify as indebtedness of the Issuer. The Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of its Note (and each
Beneficial Owner by its acceptance of an interest in the applicable Book-Entry
Note), agree to treat the Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness.
Section 4.10. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections
3.03, 3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.08 and the obligations of the Indenture
Trustee under Section 4.11) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 4.03 and (ii) Notes for
whose payment money has theretofore
25
been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
a. have become due and payable,
b. will become due and payable at the Final Scheduled Payment
Date within one year, or
c. have been declared immediately due and payable pursuant to
Section 5.02.
and the Issuer, in the case of a. or b. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable),
in trust for such purpose, in an amount sufficient to pay and discharge
the entire indebtedness on such Notes and Certificates then outstanding
not theretofore delivered to the Indenture Trustee for cancellation when
due on the Final Scheduled Payment Date;
(B) the Issuer has paid or caused to be paid all other sums payable
or to become payable hereunder, including, without limitation, all
expenses incurred by the Indenture Trustee in connection with the
defeasance described in the immediately preceding paragraph and all
amounts due and owing to the Credit Enhancer under the Insurance
Agreement; and
(C) the Issuer has delivered to the Indenture Trustee and the Credit
Enhancer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 10.01 and each
stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been
complied with and, if the Opinion of Counsel relates to a deposit
made in connection with Section 4.10(A)(2)b. above, such opinion
shall further be to the effect that such deposit will not have any
material adverse tax consequences to the Issuer, any Noteholders or
any Certificateholders.
Section 4.11. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the
Holders of Securities, of all sums due and to become due thereon for principal
and interest; but such monies need not be segregated from other funds except
to the extent required herein or required by law.
Section 4.12. Reserved.
Section 4.13. Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all monies then held by any
26
Person other than the Indenture Trustee under the provisions of this Indenture
with respect to such Notes shall, upon demand of the Issuer, be paid to the
Indenture Trustee to be held and applied according to Section 3.05 and
thereupon such Paying Agent shall be released from all further liability with
respect to such monies.
Section 4.14. Temporary Notes. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Indenture Trustee, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer shall execute and
the Note Registrar shall authenticate and make available for delivery, in
exchange therefor, Definitive Notes of authorized denominations and of like
tenor and aggregate principal amount. Until so exchanged, such temporary Notes
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
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ARTICLE V.
Default and Remedies
Section 5.01. Events of Default. The Issuer shall deliver to the
Indenture Trustee and the Credit Enhancer, within five days after learning of
the occurrence of any event which with the giving of notice and the lapse of
time would become an Event of Default written notice in the form of an
Officer's Certificate of its status and what action the Issuer is taking or
proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default described in clauses (i), (ii) or (iii) of the definition
thereof should occur, then and in every such case (i) the Indenture Trustee
with the prior consent of the Credit Enhancer or the Holders of Notes
representing not less than a majority of the Security Balances of all Notes
with the prior written consent of the Credit Enhancer, or (ii) the Credit
Enhancer may declare the Notes to be immediately due and payable, by a notice
in writing to the Issuer (and to the Indenture Trustee if given by Noteholders
or the Credit Enhancer and to the Credit Enhancer if given by the Indenture
Trustee or the Noteholders), and upon any such declaration the unpaid
principal amount of such class of Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable. If an Event of Default described in clause (iv) or (v) of the
definition thereof shall occur, the Notes shall automatically be declared due
and payable hereunder.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree
for payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the Security Balances of all Notes, by written notice to the
Issuer and the Indenture Trustee with the written consent of the Credit
Enhancer, or the Credit Enhancer, may in writing waive the related Event of
Default and rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(A) all payments of principal of and interest on the Notes
and all other amounts that would then be due hereunder or upon the
Notes if the Event of Default giving rise to such acceleration had
not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration, have
been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if default in the payment of (i) any
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) the principal of or any
installment of the principal of any Note when the same becomes due and
payable, the Issuer shall, upon demand of the Indenture Trustee, pay to it,
for the benefit of the Holders of Notes, the whole amount then due and payable
on the Notes for principal and interest, with interest upon the overdue
principal, and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, subject to the provisions of Section 10.17 hereof may with the
consent of the Credit Enhancer, and if the Credit Enhancer so directs, shall
institute a Proceeding for the collection of the sums so due and unpaid, and
may with the consent of the Credit Enhancer, and if the Credit Enhancer so
directs, shall prosecute such Proceeding to judgment or final decree, and may
with the consent of the Credit Enhancer, and if the Credit Enhancer so
directs, shall enforce the same against the Issuer or other obligor upon the
Notes and collect in the manner provided by law out of the property of the
Issuer or other obligor upon the Notes, wherever situated, the monies adjudged
or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee subject to the provisions of Section 10.17 hereof may, as more
particularly provided in Section 5.04, in its discretion, with the consent of
the Credit Enhancer, and if the Credit Enhancer so directs, shall proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee or the Credit Enhancer, as
applicable, shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention
in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including
29
any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, willful misconduct or bad faith)
and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any judicial proceedings relative
to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence, willful misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or
proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Holders of the Notes and the Credit
Enhancer, and it shall not be necessary to make any Noteholder or the Credit
Enhancer a party to any such Proceedings.
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Section 5.04. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing,
the Indenture Trustee subject to the provisions of Section 10.17 hereof may
with the prior written consent of the Credit Enhancer, or shall at the written
direction of the Credit Enhancer do one or more of the following (subject to
Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes or
under this Indenture with respect thereto, whether by declaration or
otherwise, and all amounts payable under the Insurance Agreement, enforce any
judgment obtained, and collect from the Issuer and any other obligor upon such
Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and conducted
in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee is directed to do so by the Credit Enhancer, (B) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Security Balances of the Notes and the Credit Enhancer, (C) the proceeds of
such sale or liquidation distributable to Holders are sufficient to discharge
in full all amounts then due and unpaid upon the Notes for principal and
interest and to reimburse the Credit Enhancer for any amounts drawn under the
Credit Enhancement Instrument and any other amounts due the Credit Enhancer
under the Insurance Agreement and to reimburse the Indenture Trustee for any
unreimbursed expenses, advances or liabilities incurred hereunder or (D) the
Indenture Trustee determines that the Home Equity Loans will not continue to
provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Credit Enhancer,
and of the Holders of 66 2/3% of the aggregate Security Balances of the Notes.
In determining such sufficiency or insufficiency with respect to clause (C)
and (D), the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation (which opinion shall not be an expense of the Indenture Trustee) as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose. Notwithstanding the foregoing, so long as a
Servicing Default has not occurred, any Sale of the Trust Estate shall be made
subject to the continued servicing of the Home Equity Loans by the Servicer as
provided in the Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the order
described in Section 3.05 hereof, except that payments pursuant to clause
(viii) shall be made without regard to the Accelerated Principal Payment
Amount but rather shall be made until the Security Balance of the Notes is
reduced to zero.
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The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Trust Estate. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded
and annulled, the Indenture Trustee may (with the prior written consent of the
Credit Enhancer), but need not, (but shall at the written direction of the
Credit Enhancer) elect to take and maintain possession of the Trust Estate. It
is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Notes and other obligations of the Issuer including payment to the Credit
Enhancer, and the Indenture Trustee shall take such desire into account when
determining whether or not to take and maintain possession of the Trust
Estate. In determining whether to take and maintain possession of the Trust
Estate, the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation (which opinion shall not be an expense of the Indenture Trustee) as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17
hereof, the Credit Enhancer consents and:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Security Balances
of the Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Security Balances of the Notes or by the Credit Enhancer.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
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In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Security Balances of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this
Indenture.
Section 5.07. Unconditional Rights of Noteholders to Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Credit Enhancer or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee, the Credit Enhancer or any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee, the Credit Enhancer or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Credit Enhancer or by the Noteholders, as the case may
be.
Section 5.11. Control by Credit Enhancer or Noteholders. The Holders of a
majority of the Security Balances of Notes with the prior written consent of
the Credit Enhancer, or the Credit Enhancer (so long as no Credit Enhancer
Default exists) shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power conferred on the
Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
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(ii) subject to the express terms of Section 5.04, any
direction to the Indenture Trustee to sell or liquidate the Trust Estate shall
be by Holders of Notes representing not less than 100% of the Security
Balances of Notes with the consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists);
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant
to such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Security Balances of Notes to sell or
liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines in its discretion might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Security Balances of the
Notes with the prior written consent of the Credit Enhancer, or the Credit
Enhancer (so long as no Credit Enhancer Default exists) may waive any past
Event of Default and its consequences except an Event of Default (a) with
respect to payment of principal of or interest on any of the Notes or (b) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee, the Credit Enhancer and the Holders
of the Notes shall be restored to their respective former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall
be deemed to have been cured and not to have occurred, for every purpose of
this Indenture; but no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Xxxxxx's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Security Balances of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this
Indenture.
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Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it shall not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 5.15. Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of
any portion of the Trust Estate pursuant to Section 5.04 is expressly subject
to the provisions of Section 5.05 and this Section 5.15. The power to effect
any such Sale shall not be exhausted by any one or more Sales as to any
portion of the Trust Estate remaining unsold, but shall continue unimpaired
until the entire Trust Estate shall have been sold or all amounts payable on
the Notes and under this Indenture and under the Insurance Agreement shall
have been paid. The Indenture Trustee may from time to time postpone any
public Sale by public announcement made at the time and place of such Sale.
The Indenture Trustee hereby expressly waives its right to any amount fixed by
law as compensation for any Sale.
(b) Other than pursuant to Section 5.15(e) below, the Indenture
Trustee shall not in any private Sale sell the Trust Estate, or any portion
thereof, unless:
(1) the Holders of all Notes (with the prior written consent of
the Credit Enhancer) or the Credit Enhancer consents to, or direct the
Indenture Trustee to make or the Indenture Trustee may make (with the consent
of the Credit Enhancer and all Holders of the Notes), such Sale, or
(2) the proceeds of such Sale would be not less than the entire
amount which would be payable to the Noteholders under the Notes, the
Certificateholders under the Certificates and the Credit Enhancer in respect
of amounts drawn under the Credit Enhancement Instrument and any other amounts
due the Credit Enhancer under the Insurance Agreement, in full payment thereof
in accordance with Section 5.02, on the Payment Date next succeeding the date
of such Sale, or
(3) the Indenture Trustee determines, in its sole discretion,
that the conditions for retention of the Trust Estate set forth in Section
5.05 cannot be satisfied (in making any such determination, the Indenture
Trustee may rely upon an opinion of an Independent investment banking firm
obtained and delivered as provided in Section 5.05), and the Credit Enhancer
consents in writing to such Sale, and the Holders representing at least
66-2/3% of the Security Balances of the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust
Estate at a private Sale shall not be deemed a Sale or other disposition
thereof for purposes of this Section 5.15(b).
(c) Unless the Holders and the Credit Enhancer have otherwise
consented or directed the Indenture Trustee, at any public Sale (other than
pursuant to Section 5.15(e) below) of all or any portion of the Trust Estate
at which a minimum bid equal to or greater than the
35
amount described in paragraph (2) of subsection (b) of this Section 5.15 has
not been established by the Indenture Trustee and no Person bids an amount
equal to or greater than such amount, the Indenture Trustee shall bid an
amount at least $1.00 more than the highest other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(1) any Holder or Holders of Notes may bid for and with the consent
of the Credit Enhancer purchase the property offered for sale, and upon
compliance with the terms of sale may hold, retain and possess and dispose of
such property, without further accountability, and may, in paying the purchase
money therefor, deliver any Notes or claims for interest thereon in lieu of
cash up to the amount which shall, upon distribution of the net proceeds of
such sale, be payable thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to the
Holders thereof after being appropriately stamped to show such partial
payment;
(2) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any Sale thereof, and, subject to any
requirements of, and to the extent permitted by, applicable law in connection
therewith, may purchase all or any portion of the Trust Estate in a private
sale, and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of (A) the
amount which would be distributable to the Holders of the Notes and Holders of
Certificates and amounts owing to the Credit Enhancer as a result of such Sale
in accordance with Section 5.04(b) on the Payment Date next succeeding the
date of such Sale and (B) the expenses of the Sale and of any Proceedings in
connection therewith which are reimbursable to it, without being required to
produce the Notes in order to complete any such Sale or in order for the net
Sale price to be credited against such Notes, and any property so acquired by
the Indenture Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.
(e) On the fifth Business Day prior to the Auction Payment Date, the
Auction Administrator shall effectuate the auction contemplated by Section
8.04(a) of this Indenture.
Section 5.16. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights
or remedies of the Indenture Trustee or the Noteholders shall be impaired by
the recovery of any judgment by the Indenture Trustee against the Issuer or by
the levy of any execution under such judgment upon any portion of the Trust
Estate or upon any of
36
the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a written direction from (a) the Credit
Enhancer or (b) the Indenture Trustee with the written consent of the Credit
Enhancer, the Issuer, in its capacity as holder of the Home Equity Loans,
shall, with the written consent of the Credit Enhancer, take all such lawful
action as the Credit Enhancer or the Indenture Trustee may request to cause
the Issuer to compel or secure the performance and observance by the Seller
and the Servicer, as applicable, of each of their obligations to the Issuer
under or in connection with the Home Equity Loan Purchase Agreement and the
Servicing Agreement, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the
Home Equity Loan Purchase Agreement and the Servicing Agreement to the extent
and in the manner directed by the Indenture Trustee, as pledgee of the Home
Equity Loans, including the transmission of notices of default on the part of
the Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Home Equity Loan
Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, as pledgee of the Home Equity Loans, subject to the rights
of the Credit Enhancer under the Servicing Agreement may, and at the direction
(which direction shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the Security Balances of
the Notes, with the consent of the Credit Enhancer shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller or
the Servicer under or in connection with the Home Equity Loan Purchase
Agreement and the Servicing Agreement, including the right or power to take
any action to compel or secure performance or observance by the Seller or the
Servicer, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Home Equity Loan Purchase Agreement and the
Servicing Agreement, as the case may be, and any right of the Issuer to take
such action shall not be suspended. In connection therewith, as determined by
the Indenture Trustee, the Issuer shall take all actions necessary to effect
the transfer of the Home Equity Loans to the Indenture Trustee.
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ARTICLE VI.
The Indenture Trustee
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates, reports or
opinions furnished to the Indenture Trustee and conforming to the requirements
of this Indenture; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved that
the Indenture Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it (A) pursuant to Section 5.11 or (B) from the Credit
Enhancer, which it is entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to
38
believe that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
Section 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee approved by the Credit Enhancer,
and the Indenture Trustee shall not be responsible for any misconduct or
negligence on the part of, or for the supervision of, any such agent,
attorney, custodian or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this
Indenture, the Trust Estate and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be (i) responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, (ii) accountable for the Issuer's use
of the proceeds from the Notes or (iii) responsible for any statement of the
Issuer in the Indenture or in any document issued in connection with the sale
of the Notes or in the Notes other than the Indenture Trustee's certificate of
authentication.
Section 6.05. Notice of Event of Default. If an Event of Default occurs
and is continuing and if it is actually known to a Responsible Officer of the
Indenture Trustee, the Indenture
39
Trustee shall give notice thereof to the Credit Enhancer. The Indenture
Trustee shall mail to each Noteholder notice of the Event of Default within 90
days after it occurs.
Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required
to enable such holder to prepare its federal and state income tax returns. In
addition, upon the Issuer's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuer that is in the
possession of the Indenture Trustee to enable the Issuer to perform its
federal and state income tax reporting obligations.
Section 6.07. Tax. The Indenture Trustee shall prepare and deliver the
income tax returns, tax elections, financial statements, and such annual or
other reports of the Trust pursuant to Section 2.06 of the Trust Agreement;
provided, however, that the Indenture Trustee shall not be required to compute
the Trust's gross income except to the extent it can do so without
unreasonable effort or expense based upon income statements furnished to it;
and provided, further, that the Indenture Trustee shall not be required to
prepare and file partnership tax returns on behalf of the Trust unless it
receives an Opinion of Counsel (which shall not be at the Indenture Trustee's
expense, but shall be at the expense of the Seller or other party furnishing
such opinion) as to the necessity of such filings. The Indenture Trustee shall
be paid additional reasonable compensation by the Seller for the preparation
of partnership tax returns on behalf of the Trust.
Section 6.08. Compensation and Indemnity. The Indenture Trustee and the
Custodian shall be compensated and indemnified by the Servicer in accordance
with Section 6.06 of the Servicing Agreement and Section 3.2 of the Custodial
Agreement, respectively, and all amounts owing to the Indenture Trustee and
the Custodian, hereunder and the Custodian under the Custodial Agreement in
excess of such amount whether payable by the Issuer pursuant to this Section
6.08 or upon the failure or inability of the Servicer to pay the amounts
specified in Section 6.06(b) of the Servicing Agreement shall be paid solely
as provided in Section 3.05(a)(i) and (a)(x) hereof (subject to the priorities
set forth therein). The Indenture Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Issuer shall
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including Transition Costs, costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties or the exercise
of its rights hereunder and under any other Basic Document pursuant to Section
6.17. The Indenture Trustee shall notify the Issuer promptly of any claim for
which it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate
counsel and the Issuer shall pay the fees and expenses of such counsel. The
Issuer is not obligated to reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.08 shall survive the discharge of this Indenture or
the termination of any Basic Document. When the Indenture Trustee incurs
expenses after the occurrence of an Event of Default specified
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in clause (iv) or (v) of the definition thereof with respect to the Issuer,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
Section 6.09. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the Credit
Enhancer and the successor Indenture Trustee pursuant to this Section 6.08.
The Indenture Trustee may resign at any time by so notifying the Issuer and
the Credit Enhancer. The Holders of a majority of Security Balances of the
Notes or the Credit Enhancer may remove the Indenture Trustee by so notifying
the Indenture Trustee and the Credit Enhancer and may appoint a successor
Indenture Trustee. The Issuer shall (with the consent of the Credit Enhancer)
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.12;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
fulfilling its duties under the Basic Documents.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of the Indenture Trustee for any reason (the Indenture
Trustee in such event being referred to herein as the retiring Indenture
Trustee), the Credit Enhancer may (and if the Credit Enhancer shall fail to do
so, the Issuer shall promptly with the prior written consent of the Credit
Enhancer which consent will not be unreasonably withheld) appoint a successor
Indenture Trustee. In addition, the Indenture Trustee will resign to avoid
being directly or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer.
Thereupon, the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all
property held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of Security
Balances of the Notes (with the consent of the Credit Enhancer) may petition
any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.12, any
Noteholder (with the consent of the Credit Enhancer) may petition any court of
competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
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Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.08 shall continue for
the benefit of the retiring Indenture Trustee.
Section 6.10. Successor Indenture Trustee by Xxxxxx. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.12. The Indenture Trustee shall provide
the Rating Agencies written notice of any such transaction after the Closing
Date.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
Section 6.11. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Owner Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.12 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.09 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Indenture Trustee;
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(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 6.12. Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition and it or
its parent shall have a long-term unsecured debt rating of A or better by
Xxxxx'x. The Indenture Trustee shall comply with TIA Section 310(b), including
the optional provision permitted by the second sentence of TIA Section
310(b)(9); provided, however, that there shall be excluded from the operation
of TIA Section 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 Section 310(b)(1) are met.
Section 6.13. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
Section 6.14. Representations and Warranties. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized, validly existing
and in good standing under the laws of the United States of America with power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
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(ii) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by this
Indenture and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of organization
or bylaws of the Indenture Trustee or any agreement or other instrument to
which the Indenture Trustee is a party or by which it is bound.
(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Indenture Trustee or its properties: (A)
asserting the invalidity of this Indenture (B) seeking to prevent the
consummation of any of the transactions contemplated by this Indenture or (C)
seeking any determination or ruling that might materially and adversely affect
the performance by the Indenture Trustee of its obligations under, or the
validity or enforceability of, this Indenture.
(v) The Indenture Trustee does not have notice of any adverse
claim (as such terms are used in Article 9 of the UCC) with respect to the
Home Equity Loans.
Section 6.15. Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Home Equity Loans and hold the
assets of the Trust in trust for the Noteholders and the Credit Enhancer;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by
the terms of this Indenture.
Section 6.16. Indenture Trustee May Own Securities. The Indenture
Trustee, in its individual or any other capacity may become the owner or
pledgee of Securities with the same rights it would have if it were not
Indenture Trustee.
Section 6.17. Other Capacities of Indenture Trustee. Any protection or
right afforded the Indenture Trustee pursuant to this Indenture, including but
not limited to Section 6.01(d) through (f), Section 6.02 and Section 6.08
shall apply to the Indenture Trustee acting in other capacities under the
Basic Documents, including but not limited to Certificate Paying Agent and
Certificate Registrar under the Trust Agreement, Indenture Trustee under the
Servicing Agreement and Custodian under the Custodial Agreement.
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ARTICLE VII.
Noteholders' Lists and Reports
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date and, (b) at such
other times as the Indenture Trustee and the Credit Enhancer may request in
writing, within 30 days after receipt by the Issuer of any such request, a
list of similar form and content as of a date not more than 10 days prior to
the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished to the Indenture Trustee.
Section 7.02. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(i) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(b) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
Section 7.03. Reports to the Securities and Exchange Commission.
(a) The Indenture Trustee shall reasonably cooperate with the Issuer
in connection with the Trust's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended. The Indenture Trustee shall
prepare and deliver to the Issuer any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the Rules and Regulations of
the Securities and Exchange Commission thereunder. The Servicer pursuant to
Section 6.07 of the Serving Agreement shall sign, and the Indenture Trustee
shall file (via the Securities and Exchange Commission's Electronic Data
Gathering and Retrieval System), any Form 10-K, and the Indenture Trustee
shall sign and file (via the Securities and Exchange Commission's Electronic
Data Gathering and Retrieval System) any Form 8-K.
(b) Each Form 8-K shall be filed by the Indenture Trustee within 15
days after each Distribution Date, including a copy of the Statement for such
Payment Date as an exhibit thereto. Prior to March 30th of 2004, and each year
thereafter (or such earlier date as may be required by the Exchange Act and
the Rules and Regulations of the Securities and Exchange Commission), the
Indenture Trustee shall file a Form 10-K, in substance as required by
applicable law or applicable Securities and Exchange Commission staff's
interpretations. Such Form 10-K shall include as exhibits to the Servicer's
annual statement of compliance described under Section 3.10 of the Servicing
Agreement and the accountant's report described under
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Section 3.11 of the Servicing Agreement, in each case to the extent they have
been timely delivered to the Indenture Trustee. If they are not so timely
delivered, the Indenture Trustee shall file an amended Form 10-K including
such documents as exhibits reasonably promptly after they are delivered to the
Indenture Trustee. The Indenture Trustee shall have no liability with respect
to any failure to properly prepare or file such periodic reports resulting
from or relating to the Indenture Trustee's inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit C (the "Certification"), which shall, except as described
below, be signed by the senior officer of the Servicer in charge of the
servicing function of the Servicer. On or before the fifth Business Day prior
to March 30th, 2004, and each year thereafter for which a Form 10-K is filed
under this paragraph, the Indenture Trustee shall deliver to the Servicer a
certification in the form attached hereto as Exhibit B (the "Indenture Trustee
Certification").
(c) In the event that prior to the filing date of the Form 10-K in
March of each year, the Indenture Trustee or the Servicer has actual knowledge
of information material to the Certification, that party shall promptly notify
the other party. In addition, (i) the Indenture Trustee shall indemnify and
hold harmless the Servicer and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Indenture Trustee's obligations
under this Section 7.03 or the Indenture Trustee's negligence, bad faith or
willful misconduct in connection therewith, and (ii) the Servicer shall, with
its own funds, indemnify and hold harmless the Indenture Trustee and its
officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon any
breach of the Servicer's obligations under this Section 7.03 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the indemnified party, then (i) the Indenture Trustee agrees in
connection with a breach of the Indenture Trustee's obligations under this
Section 7.03 or the Indenture Trustee's negligence, bad faith or willful
misconduct in connection therewith that it shall contribute to the amount paid
or payable by the Servicer as a result of the losses, claims, damages or
liabilities of the Servicer in such proportion as is appropriate to reflect
the relative fault of the Servicer on the one hand and the Indenture Trustee
on the other and (ii) the Servicer agrees in connection with a breach of the
Servicer's obligations under this Section 7.03 or the Servicer's negligence,
bad faith or willful misconduct in connection therewith that it shall
contribute to the amount paid or payable by the Indenture Trustee as a result
of the losses, claims, damages or liabilities of the Indenture Trustee in such
proportion as is appropriate to reflect the relative fault of the Indenture
Trustee on the one hand and the Servicer on the other.
(d) Upon any filing with the Securities and Exchange Commission, the
Indenture Trustee shall promptly deliver to the Depositor a copy of any such
executed report, statement or information.
(e) Prior to January 30 of the first year in which the Indenture
Trustee is able to do so under applicable law, the Indenture Trustee shall
file a Form 15 Suspension Notification with respect to the Trust Estate.
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Section 7.04. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this Indenture
as may be required from time to time by such rules and regulations; and
(ii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be filed
by the Issuer pursuant to clauses (i) and (ii) of this Section 7.04(a) and by
rules and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.05. Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each May 1 beginning with May 1, 2004, the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) and to the Credit Enhancer a brief report dated as of such date that
complies with TIA Section 313(a). The Indenture Trustee also shall comply with
TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders
shall be filed by the Indenture Trustee with the Commission, if required, and
each stock exchange, if any, on which the Notes are listed. The Issuer shall
notify the Indenture Trustee if and when the Notes are listed on any stock
exchange.
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ARTICLE VIII.
Accounts, Disbursements and Releases
Section 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Estate, the Indenture Trustee may,
with the consent of the Credit Enhancer, and if directed to do so by the
Credit Enhancer, shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of
appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any
right to proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain, in the name of the Indenture Trustee, for the benefit
of the Noteholders and the Certificate Paying Agent, on behalf of the
Certificateholders and the Credit Enhancer, the Payment Account as provided in
Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders, the Credit Enhancer and the
Certificate Paying Agent, on behalf of the Certificateholders and all
investments made with such monies including all income or other gain from such
investments for the period beginning on and including the Determination Date
to but excluding the third Business Day prior to the Payment Date are for the
benefit of the Servicer.
On each Payment Date, the Indenture Trustee shall distribute all
amounts on deposit in the Payment Account to Noteholders in respect of the
Notes and in its capacity as Certificate Paying Agent to Certificateholders in
the order of priority set forth in Section 3.05 (except as otherwise provided
in Section 5.04(b).
For the period beginning on and including the Determination Date and
ending on but excluding the third Business Day prior to the Payment Date the
Indenture Trustee shall invest any funds in the Payment Account at the
direction of the Servicer, but only in Permitted Investments, as provided in
Section 5.01 of the Servicing Agreement. Thereafter, the Indenture Trustee may
invest any funds in the Payment Account for its own benefit and at its own
direction, but only in Permitted Investments.
Section 8.03. Officer's Certificate. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to
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complete the same, and concluding that all conditions precedent to the taking
of such action have been complied with.
Section 8.04. Mandatory Auction; Termination Upon Distribution to
Noteholders.
(a) On the fifth Business Day before the Payment Date in May 2015,
the Auction Administrator will conduct an auction, using commercially
reasonable standards and procedures, and sell the Home Equity Loans remaining
in the Trust to third party bidders. The Auction Administrator may hire an
agent to conduct the auction or to advise it with respect to the
administration of the auction. If (x) a bid equal to at least the Minimum
Auction Price is received from a third party bidder or (y) upon its agreement
to pay amounts specified in clause (iii) the Credit Enhancer directs the
Auction Administrator to accept the highest bid received from a third party
bidder, the Auction Administrator shall (i) instruct the Trust to transfer the
Home Equity Loans to such highest bidder, (ii) deliver to the Indenture
Trustee the proceeds of the auction for deposit into the Payment Account, and
(iii) if the remaining Home Equity Loans are sold pursuant to clause (y)
above, cause the Credit Enhancer to deliver the amount of the shortfall
between the highest bid received and the Minimum Auction Price to the
Indenture Trustee for deposit into the Payment Account. If the remaining Home
Equity Loans are sold in accordance with the preceding sentence the Indenture
Trustee will pay to Noteholders the Security Balance on the Payment Date
related to the month of the auction pursuant to Section 3.05(a) hereof. If a
bid equal to at least the Minimum Auction Price is not received and the Credit
Enhancer does not direct the Auction Administrator to accept a lower bid
pursuant to clause (y) of the second preceding sentence, the Auction
Administrator will terminate the auction and the Credit Enhancer will have the
option to (i) purchase the remaining Home Equity Loans at the Minimum Auction
Price or (ii) direct the Auction Administrator to conduct another auction no
later than the fifth Business Day before any Payment Date occurring prior to
the Scheduled Final Payment Date. Thereafter, if the Credit Enhancer exercises
its purchase option described in the preceding sentence or if the Auction
Administrator receives the Minimum Auction Price at a subsequent auction held
pursuant to clause (ii) of the preceding sentence, the Indenture Trustee will
pay to Noteholders pursuant to Section 3.05(a) hereof the Security Balance on
the Payment Date immediately following the sale of the remaining Home Equity
Loans in accordance with the preceding sentence.
If the Home Equity Loans are not sold at auction to a third party
bidder and the Credit Enhancer does not exercise its option to purchase the
Home Equity Loans prior to the Scheduled Final Payment Date, the Credit
Enhancer will be required, in accordance with the terms of the Policy, to pay
the outstanding Security Balance of the Notes on the Scheduled Final Payment
Date and following such Payment by the Credit Enhancer, the Credit Enhancer
will be the Owner of the Home Equity Loans free and clear of the Lien of the
Indenture, and the Indenture Trustee and the Issuer will take all responsible
steps to transfer all of the Home Equity Loans to the Credit Enhancer.
The Issuer hereby appoints the Indenture Trustee as Auction
Administrator to conduct and administer the mandatory auction described in
this Section 8.04(a). The Indenture Trustee hereby accepts such appointment.
(b) This Indenture and the respective obligations and
responsibilities of the Issuer and the Indenture Trustee created hereby shall
terminate upon the distribution to the Noteholders, the Certificate Paying
Agent (on behalf of the Certificateholders), the Credit Enhancer and the
49
Indenture Trustee of all amounts required to be distributed pursuant to
Article III; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the
United States to the Court of St. James's, living on the date hereof.
Section 8.05. Release of Trust Estate.
(a) Subject to the payment of its fees and expenses, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the Lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions
precedent, or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no
Notes Outstanding, (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, and (iii) all sums due the Credit Enhancer have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the Lien of
this Indenture pursuant to this Section 8.05 only upon receipt of a request
from the Issuer accompanied by an Officers' Certificate and a letter from the
Credit Enhancer, stating that the Credit Enhancer has no objection to such
request from the Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the
Depositor, surrender the Credit Enhancement Instrument to the Credit Enhancer
for cancellation, upon final payment of principal and interest on the Notes.
Section 8.06. Surrender of Notes Upon Final Payment. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
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ARTICLE IX.
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies and with the prior written consent of the Credit
Enhancer, the Issuer and the Indenture Trustee, when authorized by an Issuer
Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the Lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and in
the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes or the Credit Enhancer, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent
with any other provision herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided, that such action shall not materially and adversely affect the
interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI;
(viii) [Reserved] or
(ix) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be expressly
required by the TIA;
51
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee and the Credit Enhancer shall have received an
Opinion of Counsel that entering into such indenture supplement will not have
any material adverse tax consequences to the Issuer or Noteholders.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Request, may, also without the consent of any of the Holders of the
Notes but with prior notice to the Rating Agencies and the consent of the
Credit Enhancer, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
(i) adversely affect in any material respect the interests of any Noteholder
or the Credit Enhancer or (ii) cause the Issuer to be subject to an entity
level tax.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the Security Balances of the Notes
affected thereby and the prior written consent of the Credit Enhancer, by Act
of such Holders delivered to the Issuer and the Indenture Trustee, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Note affected
thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or the
interest rate thereon, change the provisions of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Trust
Estate to payment of principal of or interest on the Notes, or change any
place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application of
funds available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof;
(ii) reduce the percentage of the Security Balances of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is required for
any waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in the
definition of the term "Holder";
(iv) reduce the percentage of the Security Balances of the
Notes required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
52
(v) modify any provision of this Section 9.02 except to
increase any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of interest
or principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation); or
(vii) permit the creation of any Lien ranking prior to or on a
parity with the Lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein, terminate the
lien of this Indenture on any property at any time subject hereto or deprive
the Holder of any Note of the security provided by the lien of this Indenture;
and provided, further, that such action shall not, as evidenced by an Opinion
of Counsel addressed to the Indenture Trustee and the Credit Enhancer, cause
the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders (as defined in
Section 10.03) under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section 9.02, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Indenture Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
53
shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
54
ARTICLE X.
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and to the Credit Enhancer (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and (ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that, in
the case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation
as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been
complied with;
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the signer of such Certificate or Opinion is
required to be Independent, the statement required by the definition
of the term "Independent".
Section 10.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the
55
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any such certificate
of an Authorized Officer or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Seller or the Issuer,
stating that the information with respect to such factual matters is in the
possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
Section 10.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
56
Section 10.04. Notices, etc., to Indenture Trustee, Issuer, Credit
Enhancer and Rating Agencies. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to
be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, XX 00000, Attention MSDWCC 2003-1 with a copy to the Indenture
Trustee's Corporate Trust Office. The Indenture Trustee shall promptly
transmit any notice received by it from the Noteholders to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: MSDWCC HELOC Trust
2003-1, in care of Wilmington Trust Company, or at any other address
previously furnished in writing to the Indenture Trustee by the Issuer. The
Issuer shall promptly transmit any notice received by it from the Noteholders
to the Indenture Trustee, or
(iii) the Credit Enhancer by the Issuer, the Indenture Trustee
or by any Noteholders shall be sufficient for every purpose hereunder to in
writing and mailed, first-class postage pre-paid, or personally delivered or
telecopied to: MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000-0000, Attention: Surveillance Department Re: MSDWCC HELOC Trust 2003-1,
Asset-Backed Notes, Series 2003-1, Confirmation: (000) 000-0000, Telecopy No.
(000) 000-0000. The Credit Enhancer shall promptly transmit any notice
received by it from the Issuer, the Indenture Trustee or the Noteholders to
the Issuer or Indenture Trustee, as the case may be.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: Xxxxx'x Investors Service, Inc.,
ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii)
in the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Services, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Asset Backed Surveillance Department; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Noteholders is given by
mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given
regardless of whether such notice is in fact actually received.
57
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 10.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the
Issuer may enter into any agreement with any Holder of a Note providing for a
method of payment, or notice by the Indenture Trustee to such Holder, that is
different from the methods provided for in this Indenture for such payments or
notices. The Issuer shall furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee shall cause payments to be made and
notices to be given in accordance with such agreements.
Section 10.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required
to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
Section 10.08. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
Section 10.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 10.11. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, the Credit
Enhancer, and any other party secured hereunder, and any other
58
Person with an ownership interest in any part of the Trust Estate, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 10.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
Section 10.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14. Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 10.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 10.16. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity. For all purposes of this Indenture, in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Article VI, VII and VIII of the Trust Agreement.
Section 10.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in
59
connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
Section 10.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee or the
Credit Enhancer, during the Issuer's normal business hours, to examine all the
books of account, records, reports and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Issuer's affairs,
finances and accounts with the Issuer's officers, employees, and Independent
certified public accountants, all at such reasonable times and as often as may
be reasonably requested. The Indenture Trustee or the Credit Enhancer shall
and shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the
extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
Section 10.19. Rights of the Credit Enhancer to Exercise Rights of
Noteholder. By accepting its Note, each Noteholder agrees that unless a Credit
Enhancer Default exists, the Credit Enhancer shall have the right to exercise
all rights of the Noteholders under this Agreement without any further consent
of the Noteholders.
Section 10.20. Third-Party Beneficiary. The Credit Enhancer shall be a
third-party beneficiary of this Indenture entitled to enforce the provisions
hereof as if a party hereto.
60
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
MSDWCC HELOC TRUST 2003-1,
as Issuer
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signer
XXXXX FARGO BANK MINNESOTA,
N.A.,
as Indenture Trustee
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA, N.A.,
xxxxxx accepts the appointment as
Paying Agent pursuant to Section
3.03 hereof, as Note Registrar
pursuant to Section 4.02 hereof and
as Auction Administrator pursuant to
Section 8.04 hereof.
By:
Name:
Title:
61
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 28th day of May, 2003, before me personally appeared Xxxxx
X. Xxxxxx, to me known, who being by me duly sworn, did depose and say, that
he resides at Wilmington Trust Company, that he is the Vice President of the
Owner Trustee, one of the corporations described in and which executed the
above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his
name thereto by like order.
Notary Public
62
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 28th day of May, 2003, before me personally appeared Xxxxx
Xxxxxx, to me known, who being by me duly sworn, did depose and say, that he
resides at Xxxxx Fargo Bank Minnesota, N.A., that he is the Vice President of
Xxxxx Fargo Bank Minnesota, N.A., as Indenture Trustee, one of the
corporations described in and which executed the above instrument; that she
knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation; and that he signed his name thereto by like
order.
Notary Public
NOTORIAL SEAL
63
Exhibit A
FORM OF NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN AND IN THE INDENTURE. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
MSDWCC HELOC TRUST 2003-1
HELOC Asset -Backed Note
Registered Principal Amount: $483,155,000
No. _ Note Rate: Floating
CUSIP NO. [o]
MSDWCC HELOC Trust 2003-1, a statutory trust duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of $483,155,000, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal on the Notes pursuant to Section 3.05 of the Indenture dated as of
May 1, 2003 (the "Indenture") between the Issuer, as Issuer, and Xxxxx Fargo
Bank Minnesota, N.A., as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall
be due and payable on the Payment Date in November 2015, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not
defined herein are defined in Appendix A of the Indenture.
Interest on the Notes will be paid monthly on each Payment Date at
the Note Rate for the related Interest Period subject to limitations which may
result in Interest Shortfalls (as
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further described in the Indenture). The Note Rate for each Interest Period
will be a floating rate equal to the lesser of (i) LIBOR plus 0.27% per annum
(or 0.54% on or after the Optional Redemption Date) and (ii) the Maximum Net
Loan Rate. LIBOR for each applicable Interest Period will be determined on the
second LIBOR Business Day immediately preceding (i) the Closing Date in the
case of the first Interest Period and (ii) the first day of each succeeding
Interest Period by the Indenture Trustee as set forth in the Indenture. All
determinations of LIBOR by the Indenture Trustee shall, in the absence of
manifest error, be conclusive for all purposes, and each holder of this Note,
by accepting this Note, agrees to be bound by such determination. Interest on
this Note will accrue for each Payment Date from the most recent Payment Date
on which interest has been paid (in the case of the first Payment Date, from
the Closing Date) to but excluding such Payment Date. Interest will be
computed on the basis of the actual number of days in each Interest Period and
a year assumed to consist of 360 days. Principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Unless the certificate of authentication hereon has been executed by
the Note Registrar whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its HELOC Asset-Backed Notes (herein called the "Notes"), all
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be secured by the collateral pledged as
security therefor as provided in the Indenture.
This Note is entitled to the benefits of an irrevocable and
unconditional financial guaranty insurance policy issued by MBIA Insurance
Corporation.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on June, 2003, as described in the Indenture.
"Payment Date" means the 25th day of each month, or, if any such date is not a
Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and
payable in full on the Payment Date in November 2015 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and
be continuing, then the Indenture Trustee or the holders of Notes representing
not less than a majority of the Security Balances of all Notes with the
consent of the Credit Enhancer, or the Credit Enhancer may declare the Notes
to be immediately due and payable in the manner provided in Section 5.02 of
the Indenture. All principal payments on the Notes shall be made pro rata to
the holders of Notes entitled thereto.
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Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by wire transfer or check mailed to
the Person whose name appears as the Registered Holder of this Note (or one or
more Predecessor Notes) on the Note Register as of the close of business on
each Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Depository Agency (initially, such
nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Such
checks shall be mailed to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Payment Date shall be binding upon
all future holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount
of this Note on a Payment Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due
and payable shall be payable only upon presentation and surrender of this Note
at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
Corporate Trust Office, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the holder hereof or such holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended,
and thereupon one or more new Notes in authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the Note Registrar shall require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any registration of transfer or exchange of this
Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note,
or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes
or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary
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shall be fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered
(as of the day of determination or as of such other date as may be specified
in the Indenture) as the owner hereof for all purposes, whether or not this
Note be overdue, and none of the Issuer, the Indenture Trustee or any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the Indenture Trustee and the rights of the holders of the
Notes under the Indenture at any time by the Issuer and the Indenture Trustee
with the consent of the holders of Notes representing a majority of the
Security Balances of all Notes at the time Outstanding and the Credit Enhancer
and with prior notice to the Rating Agencies. The Indenture also contains
provisions permitting the holders of Notes representing specified percentages
of the Security Balances of all Notes, on behalf of the holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any
one of more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Issuer and the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
holders of the Notes issued thereunder but with prior notice to the Rating
Agencies and the Credit Enhancer.
The term "Issuer" as used in this Note includes any successor or the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
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No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair, the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Wilmington Trust Company in its
individual capacity, Xxxxx Fargo Bank Minnesota, N.A., in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on this Note
or performance of, or omission to perform, any of the covenants, obligations
or indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note
or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that
such holder or Beneficial Owner of a Note will not at any time institute
against the Depositor, the Seller, the Servicer, or the Issuer, or join in any
institution against the Depositor, the Seller, the Servicer or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
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IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and
not in its individual capacity, has caused this Note to be duly executed.
MSDWCC HELOC TRUST 2003-1
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as
Owner Trustee
Dated:
By
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within mentioned Indenture.
XXXXX FARGO BANK MINNESOTA,
N.A., not in its individual capacity but
solely as Note Registrar
Dated:
By
Authorized Signatory
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
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FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfer unto
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(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
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attorney, to transfer said Note on the books kept for
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registration thereof, with full power of substitution in the premises.
Dated:
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Signature Guaranteed*:
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* 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.
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EXHIBIT B
FORM OF CERTIFICATION TO BE
PROVIDED TO SERVICER BY INDENTURE TRUSTEE
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Re:
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I, [identify the certifying individual by name and title], certify to
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation (the "Servicer") and its
officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution date reports
filed in respect of periods included in the year covered by that annual
report, of the Trust;
(2) Based upon my knowledge, the information in these distribution
reports, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by that annual report;
(3) Based upon my knowledge, the distribution information required to be
provided by the trustee under the pooling and servicing agreement for
inclusion in these reports is included in these reports;
Date:
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XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
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[Signature]
[Name of Institution and Title]
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EXHIBIT C
FORM OF CERTIFICATION TO BE
PROVIDED BY SERVICER WITH FORM 10-K
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Re: The Servicing Agreement dated as of May 1, 2003, among Xxxxxx Xxxxxxx
Xxxx Xxxxxx Credit Corporation, as Servicer, MSDWCC HELOC Trust 2003-1,
as Issuer, and Xxxxx Fargo Bank Minnesota, National Association, as
Indenture Trustee
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I, [identify the certifying individual by name, title and
institution], certify that:
(1) I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution date reports filed in respect of periods
included in the year covered by this annual report, of the Trust;
(2) Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by this annual
report;
(3) Based on my knowledge, the servicing information required to be
provided to the Indenture Trustee by the servicer under the servicing
agreement for inclusion in these reports is included in these reports;
(4) Based upon my knowledge and upon the annual compliance statement
included in the report and delivered to the Indenture Trustee in
accordance with the terms of the servicing agreement, and except as
disclosed in the reports, the servicer has fulfilled its obligations
under the agreement; and
(5) The reports disclose all significant deficiencies relating to the
servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers that is included in these reports.
Date:
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[Signature]
[Name of Institution and Title
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