EXECUTION
INDENTURE
BETWEEN
AMERICAN RESIDENTIAL EAGLE BOND TRUST 1999-1,
AS ISSUER,
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, AS INDENTURE TRUSTEE
Dated as of April 1, 1999
Relating to
AMERICAN RESIDENTIAL EAGLE BOND TRUST 1999-1
MORTGAGE-BACKED LIBOR NOTES, CLASS A, SERIES 1999-1
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01. General Definitions................................................................................2
ARTICLE II
THE NOTES
Section 2.01. Forms Generally...................................................................................24
Section 2.02. Forms Of Certificate Of Authentication............................................................24
Section 2.03. General Provisions With Respect To Principal And Interest Payment.................................24
Section 2.04. Denominations.....................................................................................25
Section 2.05. Execution, Authentication, Delivery And Dating....................................................25
Section 2.06. Registration, Registration Of Transfer And Exchange...............................................26
Section 2.07. Xxxxxxxxx, Xxxxxxxxx, Lost Or Stolen Notes........................................................27
Section 2.08. Payments Of Principal And Interest................................................................27
Section 2.09. Persons Deemed Owner..............................................................................29
Section 2.10. Cancellation......................................................................................29
Section 2.11. Authentication And Delivery Of Notes..............................................................29
Section 2.12. Book-Entry Note...................................................................................31
Section 2.13. Termination Of Book Entry System..................................................................32
ARTICLE III
COVENANTS
Section 3.01. Payment Of Notes..................................................................................32
Section 3.02. Maintenance Of Office Or Agency...................................................................33
Section 3.03. Money For Note Payments To Be Held In Trust.......................................................33
Section 3.04. Existence Of Issuer...............................................................................35
Section 3.05. Protection Of Trust Estate........................................................................35
Section 3.06. [Reserved]........................................................................................36
Section 3.07. Performance Of Obligations; Master Servicing Agreement............................................36
Section 3.08. Investment Company Act............................................................................37
Section 3.09. Negative Covenants................................................................................37
Section 3.10. Annual Statement As To Compliance.................................................................38
Section 3.11. Restricted Payments...............................................................................38
Section 3.12. Treatment Of Notes As Debt For Tax Purposes.......................................................38
Section 3.13. Notice Of Events Of Default.......................................................................38
Section 3.14. Further Instruments And Acts......................................................................39
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction And Discharge Of Indenture...........................................................39
Section 4.02. Application Of Trust Money........................................................................40
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event Of Default..................................................................................40
Section 5.02. Acceleration Of Maturity; Rescission And Annulment................................................42
Section 5.03. Collection Of Indebtedness And Suits For Enforcement By Indenture Trustee.........................42
Section 5.04. Remedies..........................................................................................43
Section 5.05. Indenture Trustee May File Proofs Of Claim........................................................43
Section 5.06. Indenture Trustee May Enforce Claims Without Possession Of Notes..................................44
Section 5.07. Application Of Money Collected....................................................................44
Section 5.08. Limitation On Suits...............................................................................45
Section 5.09. Unconditional Rights Of Noteholders To Receive Principal And Interest.............................46
Section 5.10. Restoration Of Rights And Remedies................................................................46
Section 5.11. Rights And Remedies Cumulative....................................................................46
Section 5.12. Delay Or Omission Not Waiver......................................................................47
Section 5.13. Control By Noteholders............................................................................47
Section 5.14. Waiver Of Past Defaults...........................................................................47
Section 5.15. Undertaking For Costs.............................................................................48
Section 5.16. Waiver Of Stay Or Extension Laws..................................................................48
Section 5.17. Sale Of Trust Estate..............................................................................48
Section 5.18. Action On Notes...................................................................................50
Section 5.19. No Recourse To Other Trust Estates Or Other Assets Of The Issuer..................................50
Section 5.20. Application Of The Trust Indenture Act............................................................50
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties Of Indenture Trustee.......................................................................50
Section 6.02. Notice Of Default.................................................................................52
Section 6.03. Rights Of Indenture Trustee.......................................................................52
Section 6.04. Not Responsible For Recitals Or Issuance Of Notes.................................................52
Section 6.05. May Hold Notes....................................................................................53
Section 6.06. Money Held In Trust...............................................................................53
Section 6.07. Eligibility, Disqualification.....................................................................53
Section 6.08. Indenture Trustee's Capital And Surplus...........................................................53
Section 6.09. Resignation And Removal; Appointment Of Successor.................................................53
Section 6.10. Acceptance Of Appointment By Successor............................................................55
Section 6.11. Merger, Conversion, Consolidation Or Succession To Business Of Indenture Trustee..................55
Section 6.12. Preferential Collection Of Claims Against Issuer..................................................56
Section 6.13. Co-Indenture Trustees And Separate Indenture Trustees.............................................56
Section 6.14. Authenticating Agents.............................................................................57
Section 6.15. [Reserved]........................................................................................58
Section 6.16. Indenture Trustee Fees And Expenses...............................................................58
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names And Addresses Of Noteholders............................59
Section 7.02. Preservation Of Information; Communications To Noteholders........................................59
Section 7.03. Reports by Indenture Trustee......................................................................59
Section 7.04. Reports By Issuer.................................................................................60
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Collection Of Moneys..............................................................................60
Section 8.02. Note Payment Account; Supplemental Interest Payment Account.......................................60
Section 8.03. Claims Against The FSA Policy.....................................................................63
Section 8.04. General Provisions Regarding The Note Payment Account, the Supplemental Interest Payment Account And Mortgage
Loans..........................................................................................64
Section 8.05. Releases Of Defective Mortgage Loans..............................................................65
Section 8.06. Reports By Indenture Trustee To Noteholders; Access To Certain Information........................66
Section 8.07. Trust Estate Mortgage Files.......................................................................66
Section 8.08. Amendment To Master Servicing Agreement...........................................................66
Section 8.09. Delivery Of The Trustee Mortgage Files Pursuant To Master Servicing Agreement.....................67
Section 8.10. [Reserved]........................................................................................67
Section 8.11. Termination Of Master Servicer....................................................................67
Section 8.12. Opinion Of Counsel................................................................................67
Section 8.13. Appointment Of Custodians.........................................................................67
Section 8.14. Rights Of The Note Insurer To Exercise Rights Of Noteholders......................................68
Section 8.15. Trust Estate And Accounts Held For Benefit Of The Note Insurer....................................68
Section 8.16. Rights in Respect of Insolvency Proceedings.......................................................69
Section 8.17. Effect of Payments by the Note Insurer; Subrogation...............................................70
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent Of Noteholders............................................70
Section 9.02. Supplemental Indentures With Consent Of Noteholders...............................................71
Section 9.03. Execution Of Supplemental Indentures..............................................................72
Section 9.04. Effect Of Supplemental Indentures.................................................................73
Section 9.05. Conformity With Trust Indenture Act...............................................................73
Section 9.06. Reference In Notes To Supplemental Indentures.....................................................73
Section 9.07. Amendments To Governing Documents.73
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption.......................................................................................74
Section 10.02. Form Of Redemption Notice........................................................................75
Section 10.03. Notes Payable On Optional Redemption.............................................................76
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates And Opinions.............................................................76
Section 11.02. Form Of Documents Delivered To Indenture Trustee.................................................77
Section 11.03. Acts Of Noteholders..............................................................................77
Section 11.04. Notices, Etc., To Indenture Trustee, The Note Insurer And Issuer.................................78
Section 11.05. Notices And Reports To Noteholders; Waiver Of Notices............................................79
Section 11.06. Rules By Indenture Trustee.......................................................................80
Section 11.07. Conflict With Trust Indenture Act................................................................80
Section 11.08. Effect Of Headings And Table Of Contents.........................................................80
Section 11.09. Successors And Assigns...........................................................................80
Section 11.10. Separability.....................................................................................80
Section 11.11. Benefits Of Indenture............................................................................81
Section 11.12. Legal Holidays...................................................................................81
Section 11.13. Governing Law....................................................................................81
Section 11.14. Counterparts.....................................................................................81
Section 11.15. Recording Of Indenture...........................................................................81
Section 11.16. Issuer Obligation................................................................................81
Section 11.17. No Petition......................................................................................82
Section 11.18. Inspection.......................................................................................82
Section 11.19. Usury............................................................................................82
Section 11.20. Third Party Beneficiary..........................................................................83
Section 11.21. Limitation of Liability of Wilmington Trust Company..............................................83
Section 11.21. Limitation of Wilmington Trust Company...........................................................82
SCHEDULES AND EXHIBITS
Schedule 1 Schedule of Mortgage Loans
Exhibit A Form of Note
Exhibit B FSA Policy
Exhibit C Form of Notice of Claim
THIS INDENTURE, dated as of April 1, 1999 (as amended or supplemented
from time to time as permitted hereby, this "Indenture"), is between AMERICAN
RESIDENTIAL EAGLE BOND TRUST 1999-1, a Delaware statutory business trust
(together with its permitted successors and assigns, the "Issuer"), and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association,
as indenture trustee (together with its permitted successors in the trusts
hereunder, the "Indenture Trustee").
Preliminary Statement
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for its Mortgage-Backed LIBOR Notes, Class A, Series
1999-1 (the "Notes"), issuable as provided in this Indenture. All covenants
and agreements made by the Issuer herein are for the benefit and security of
the Holders of the Notes and the Note Insurer. The Issuer is entering into
this Indenture, and the Indenture Trustee is accepting the trusts created
hereby, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
Granting Clause
The Issuer hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes and the Note Insurer, all of the Issuer's
right, title and interest in and to (a) the Mortgage Loans listed in Schedule
I to this Indenture (including property that secures a Mortgage Loan that
becomes an REO Property), including the related Mortgage Files delivered or to
be delivered to the Custodian, on behalf of the Indenture Trustee, pursuant to
the Custody Agreement, all payments of principal received, collected or
otherwise recovered on and after the Cut-off Date for each Mortgage Loan
(other than any principal or interest payments due prior to the Cut-off Date),
all payments of interest (but not including prepayment charges) accruing on
each Mortgage Loan on and after the Cut-off Date therefor whenever received
and all other proceeds received in respect of such Mortgage Loans, (b)
security interests in the Mortgaged Properties; (c) rights under certain
primary mortgage and hazard insurance policies, if any, covering the Mortgaged
Properties; (d) the Issuer's rights under the underlying Purchase and Sale
Agreements; (e) the Issuer's rights under the Sale Agreements; (f) the
Issuer's rights under the Master Servicing Agreement; (g) amounts on deposit
relating to the Mortgage Loans in the Collection Account and Note Payment
Account; (h) all other ancillary or incidental funds, rights and properties
related to the foregoing; and (i) all proceeds of the foregoing. Such Grants
are made, however, in trust, to secure the Notes equally and ratably without
prejudice, priority or distinction between any Note and any other Note by
reason of difference in time of issuance or otherwise, and for the benefit of
the Note Insurer to secure (x) the payment of all amounts due on the Notes in
accordance with their terms, (y) the payment of all other sums payable under
this Indenture and (z) compliance with the provisions of this Indenture, all
as provided in this Indenture. All terms used in the foregoing granting
clauses that are defined in Section 1.01 are used with the meanings given in
said Section.
The Indenture Trustee acknowledges such Xxxxx, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the
Holders of the Notes may be adequately and effectively protected. The
Indenture Trustee agrees that it will hold the FSA Policy in trust and that it
will hold any proceeds of any claim upon the FSA Policy, solely for the use
and benefit of the Noteholders in accordance with the terms hereof and the FSA
Policy.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions.
Except as otherwise specified or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Indenture, and the definitions of such terms are applicable
to the singular as well as to the plural forms of such terms and to the
masculine as well as to the feminine genders of such terms. Whenever reference
is made herein to an Event of Default or a Default known to the Indenture
Trustee or of which the Indenture Trustee has notice or knowledge, such
reference shall be construed to refer only to an Event of Default or Default
of which the Indenture Trustee is deemed to have notice or knowledge pursuant
to Section 6.01(d). All other terms used herein that are defined in the Trust
Indenture Act (as hereinafter defined), either directly or by reference
therein, have the meanings assigned to them therein.
"5/25 Delayed Adjustment Date Adjustable Rate Mortgage Loans": The
Delayed Adjustment Date Adjustable Rate Mortgage Loans the first Mortgage Rate
adjustment for which occurs after an initial period of five years as
identified in the Schedule of Mortgage Loans.
"Accountant": A Person engaged in the practice of accounting who (except
when this Indenture provides that an Accountant must be Independent) may be
employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"Act": With respect to any Noteholder, as defined in Section 11.03.
"Adjustable Rate Mortgage Loans": Those Mortgage Loans identified in the
Schedule of Mortgage Loans which provide for adjustment of the applicable
Mortgage Rate as specified in the related Mortgage Note.
"Administrative Fee Amount": With respect to any Payment Date, the sum of
the Master Servicing Fee, the Indenture Trustee Fee, the Management Fee, the
Mortgage Insurance Premium, the Note Insurance Premium and any fee or expense
owing to the Owner Trustee relating to such Payment Date.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract, relation to individuals or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent": Any Note Registrar, Paying Agent, Authenticating Agent or
Custodian.
"Aggregate Expense Rate": The sum of (a) the Master Servicing Fee Rate,
(b) the Indenture Trustee Fee Rate, (c) the Note Insurance Premium Rate, (d)
the Mortgage Insurance Premium Rate, (e) the Management Fee Rate, and (f) the
applicable Minimum Spread.
"Aggregate Principal Balance": With respect to any Payment Date, the
aggregate of the Principal Balances of the Mortgage Loans as of the related
Determination Date (or other specified date).
"AmREIT": American Residential Investment Trust, Inc., a Maryland
corporation operating as a real estate investment trust, and its successors
and assigns.
"Annual Loss Percentage": With respect to any Payment Date, the product
of (i) 2 and (ii) a fraction, expressed as a percentage, the numerator of
which is the aggregate of all Realized Losses for the six preceding Due
Periods and the denominator of which is the aggregate Principal Balances of
the Mortgage Loans and REO Properties as of the day immediately preceding the
first day of the sixth preceding Due Period.
"Assignments": The original instrument of assignment of a Mortgage,
including any interim assignments, from the originator or any other holder of
any Mortgage Loan to the Indenture Trustee (that in each case may, to the
extent permitted by the laws of the state in which the related Mortgaged
Property is located, be a blanket instrument of assignment covering other
Mortgages and Mortgage Notes as well and that may also be an instrument of
assignment running directly from the mortgagee of record under the related
Mortgage to the Indenture Trustee).
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Issuer pursuant to Section 6.14, until any successor
Authenticating Agent for the Notes is named, and thereafter "Authenticating
Agent" shall mean such successor. The initial Authenticating Agent shall be
the Indenture Trustee. Any Authenticating Agent other than the Indenture
Trustee shall sign an instrument under which it agrees to be bound by all of
the terms of this Indenture applicable to the Authenticating Agent.
"Authorized Officer": With respect to (i) the Indenture Trustee, any
Responsible Officer, (ii) the Owner Trustee, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer, any
financial services officer or any other officer of the Owner Trustee
customarily performing functions similar to those performed by the above
officers and (iii) any other Person, the Chairman, Chief Operating Officer,
President or any Vice President of such Person.
"Available Funds": With respect to any Payment Date, the sum of the
amounts described in clauses (a) through (h) below, less, (i) the
Administrative Fee Amount in respect of such Payment Date; (ii) Monthly
Advances and Servicing Advances, including Nonrecoverable Advances, previously
made that are reimbursable to the Master Servicer (other than those included
in liquidation expenses for any Liquidated Mortgage Loan and already
reimbursed from the related Liquidation Proceeds) in such Collection Period to
the extent permitted by the Master Servicing Agreement; (iii) any unpaid
Master Servicing Fees attributable to prior periods due to the Master
Servicer; (iv) any unpaid fees and expenses or other amounts owing the
Indenture Trustee as provided in clauses (vi) and (vii) of the first sentence
of Section 8.02(d) hereof, and any unpaid fees and expenses or other amounts
owing to the Owner Trustee or the Manager attributable to prior periods; and
(v) the aggregate amounts (A) deposited into the Collection Account or Note
Payment Account that may not be withdrawn therefrom pursuant to a final and
nonappealable order of a United States bankruptcy court of competent
jurisdiction imposing a stay pursuant to Section 362 of the Bankruptcy Code
and that would otherwise have been included in Available Funds on such Payment
Date and (B) received by the Master Servicer or the Indenture Trustee that are
recoverable and sought to be recovered from the Issuer as avoidable preference
by a trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with
a final nonappealable order of a court of competent jurisdiction:
(a) all scheduled payments of interest received with respect to the
Mortgage Loans due during the related Due Period and all other interest
payments on or in respect of such Mortgage Loans received by or on behalf
of the Master Servicer during the related Collection Period, net of
amounts representing interest due on such Mortgage Loans in respect of
any period prior to the Cut-off Date, plus any Compensating Interest
payments made by the Master Servicer in respect of the Mortgage Loans and
any net income from related REO Properties for such Collection Period;
(b) all scheduled payments of principal received with respect to the
Mortgage Loans and due during the related Due Period and all other
principal payments (including Principal Prepayments, but excluding
amounts described elsewhere in this definition) received or deemed to be
received during the related Collection Period in respect of such Mortgage
Loans;
(c) the aggregate of any Insurance Proceeds received during the
related Collection Period;
(d) the aggregate of any Net Liquidation Proceeds received during
the related Collection Period;
(e) the aggregate of the amounts received in respect of any Mortgage
Loans that are required or permitted to be repurchased, released, removed
or substituted by the Seller or Initial Seller during the related
Collection Period, to the extent such amounts are received by the
Indenture Trustee on or before the related Remittance Date;
(f) the amount of any Monthly Advances made for such Payment Date;
and
(g) the aggregate of amounts deposited in the Note Payment Account
by the Indenture Trustee, the Issuer or the Note Insurer, as the case may
be, during such Collection Period in connection with a redemption of the
Notes.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Basic Documents": This Agreement, the Trust Agreement, the Master
Servicing Agreement, the Initial Mortgage Loan Purchase Agreement, the
Mortgage Loan Purchase Agreement, the Management Agreement, the FSA Insurance
Agreement, the Indemnification Agreement, the FSA Premium Letter and the
Custody Agreement.
"Basis Risk Shortfall": An amount equal to the excess of (i) the Monthly
Interest Amount calculated on the basis of One-Month LIBOR plus the applicable
Note Margin (but subject to the Cap Rate) over (ii) the Monthly Interest
Amount for such Payment Date calculated on the basis of the Net Funds Cap.
"Beneficial Owner": With respect to a Book-Entry Note, the Person who is
the beneficial owner of such Note as reflected on the books of the Clearing
Agency for the Notes or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Issuer, or
its Manager, as the case may be, in its reasonable discretion. Such efforts do
not require the Issuer or its Manager, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Issuer or its Manager, as the case may be, to advance or expend
fees or sums of money in addition to those specifically set forth in this
Indenture.
"Book-Entry Notes": Any Notes registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (directly or as an indirect participant in accordance with the
rules of such Clearing Agency).
"Book-Entry Termination": The time at which the book-entry registration
of the Book-Entry Notes shall terminate, as specified in Section 2.13.
"Business Day": Any day other than (i) a Saturday or Sunday or (ii) a day
that is either a legal holiday or a day on which the Note Insurer is closed or
banking institutions in the states of Maryland or Minnesota or the city of New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law, regulation or executive order to be closed.
"CAP Agreement": The Confirmation and Agreement (Ref. No. NCC4105), dated
April 15, 1999, by and between the Note Insurer and Bear Xxxxxxx Financial
Products Inc.
"CAP Rate": 15.00% per annum.
"Certificate Distribution Account": The segregated trust account
established and maintained by the Certificate Paying Agent pursuant to Section
3.09 of the Trust Agreement.
"Certificate Paying Agent": The certificate paying agent appointed under
the Trust Agreement which initially shall be the Indenture Trustee.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as
amended, and the regulations of the Commission thereunder and shall initially
be The Depository Trust Company of New York, the nominee for which is Cede &
Co.
"Clearing Agency Participants": The entities for whom the Clearing Agency
will maintain book-entry records of ownership and transfer of Book-Entry
Notes, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.
"Closing Date": April 15, 1999.
"Code": The Internal Revenue Code of 1986, as amended, and as may be
further amended from time to time, as successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form and proposed regulations thereunder to the extent
that, by reason of their proposed effective date, such proposed regulations
would apply.
"Collection Account": As defined in the Master Servicing Agreement.
"Collection Period": As defined in the Master Servicing Agreement.
"Commission": The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time under the Trust Indenture Act or similar legislation
replacing the Trust Indenture Act.
"Compensating Interest Payments": As to any Payment Date, the payments
made by the Master Servicer pursuant to Section 3(v) of the Master Servicing
Agreement.
"Corporate Trust Office": The principal office of the Indenture Trustee
at which at any particular time its corporate trust business with respect to
this Indenture shall be principally administered, which office at the date of
the execution of this Indenture is located at Sixth Street and Marquette
Avenue, Minneapolis, MN 55479, Attention: American Residential Eagle Bond
Trust 1999-1, Class A, Series 1999-1, with a copy to the Indenture Trustee at
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: American
Residential Eagle Bond Trust 1999-1, Class A, Series 1999-1.
"Cumulative Loss Percentage": With respect to any Payment Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate
amount of Realized Losses incurred from the Closing Date through the end of
the related Due Period, and the denominator of which is the Cut-off Date
Aggregate Principal Balance of the Mortgage Loans.
"Custodian": Bankers Trust Company of California, N.A., as custodian
under the Custodial Agreement and its successors and assigns.
"Custody Agreement": The agreement between the Indenture Trustee, the
Issuer and the Custodian dated as of April 1, 1999.
"Cut-Off Date": April 1, 1999.
"Cut-Off Date Aggregate Principal Balance": The aggregate of the
Principal Balances of the Mortgage Loans as of the Cut-off Date.
"Default": Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
"Defective Mortgage Loan": Any Mortgage Loan that is required to be
repurchased or substituted by the Initial Seller pursuant to Section 2(a) of
the Master Servicing Agreement.
"Definitive Notes": Notes other than Book-Entry Notes.
"Delayed Adjustment Date Adjustable Rate Mortgage Loans": The Adjustable
Rate Mortgage Loans, the first Mortgage Rate adjustment for which occurs after
an initial period ranging from two to five years as identified in the Schedule
of Mortgage Loans.
"Deleted Mortgage Loan": As defined in the Master Servicing Agreement.
"Delinquency Amount": As of any Payment Date, the product of the
Delinquency Percentage for such Payment Date and the Aggregate Principal
Balance of the Mortgage Loans as of the Determination Date relating to such
Payment Date.
"Delinquency Percentage": For any Due Period, a fraction, expressed as a
percentage, (i) the numerator of which is the aggregate of the Scheduled
Principal Balance as of the last day of such Due Period of all Mortgage Loans
that were 90 or more days contractually Delinquent, in foreclosure, REO
Property or for which the related Mortgagor was in a bankruptcy proceeding or
paying a reduced Monthly Payment as a result of a bankruptcy workout as of the
last day of such Due Period and the denominator of which is the aggregate
unpaid Scheduled Principal Balance of all Mortgage Loans as of the last day of
such Due Period.
"Delinquent": As defined in the Master Servicing Agreement.
"Depositor": Bear Xxxxxxx Asset Backed Securities, Inc., a Delaware
corporation and a wholly owned subsidiary of The Bear Xxxxxxx Companies Inc.,
and its successors and assigns.
"Determination Date": As to any Payment Date, the last day of the Due
Period relating to such Payment Date.
"Due Date": With respect to any Mortgage Loan, the date on which a
scheduled payment is due under the related Mortgage Note.
"Due Period": With respect to any Payment Date, the period commencing on
the second day of the calendar month immediately preceding the calendar month
in which such Payment Date occurs (or, with respect to the first Payment Date,
on the Cut-off Date) and ending on the first day of the calendar month in
which such Payment Date occurs.
"Eligible Account": As defined in the Master Servicing Agreement.
"Event Of Default": As defined in Section 5.01.
"Excess Cash": With respect to any Payment Date, Available Funds for such
Payment Date, minus the sum of (i) any amounts payable to the Note Insurer
pursuant to the FSA Insurance Agreement, (ii) the Monthly Interest Amount for
the related Payment Date and (iii) the Monthly Principal Amount for the
related Payment Date.
"Excess Cash Payment": As defined in clause fourth of Section 8.02(d).
"FDIC": The Federal Deposit Insurance Corporation and its successors in
interest.
"Final Maturity Date": The Payment Date in April 25, 2029.
"Fixed Rate Mortgage Loans": Those Mortgage Loans identified in the
Schedule of Mortgage Loans that bear interest rates which are fixed for the
lives of such Mortgage Loans.
"Formula Rate": One-Month LIBOR plus the applicable Note Margin.
"FSA": Financial Security Assurance, Inc., its successors and assigns.
"FSA Insurance Agreement": As defined in the Master Servicing Agreement.
"FSA Policy": As defined in the Master Servicing Agreement.
"Grant": To assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Mortgage
Loan and related Mortgage Files, a Permitted Investment, the Master Servicing
Agreement, the Mortgage Loan Purchase Agreement, or any other instrument shall
include all rights, powers and options (but none of the obligations) of the
Granting party thereunder, including, without limitation, the immediate and
continuing right to claim for, collect, receive and give receipts for
principal and interest payments thereunder, insurance proceeds, Purchase
Prices and all other moneys payable thereunder and all proceeds thereof, to
give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the
name of the Granting party or otherwise, and generally to do and receive
anything that the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"Highest Lawful Rate": As defined in Section 11.19.
"Indenture": This instrument as originally executed and, if from time to
time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, as so supplemented
or amended. All references in this instrument to designated "Articles",
"Sections", "Subsections" and other subdivisions are to the designated
Articles, Sections, Subsections and other subdivisions of this instrument as
originally executed. The words "herein", "hereof', "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section, Subsection or other subdivision.
"Indenture Trustee": Norwest Bank Minnesota, National Association, a
national banking association, and any Person resulting from or surviving any
consolidation or merger to which it may be a party until a successor Person
shall have become the Indenture Trustee pursuant to the applicable provisions
of this Indenture, and thereafter "Indenture Trustee" shall mean such
successor Person.
"Indenture Trustee Fee": With respect to any Payment Date, the monthly
fee payable to the Indenture Trustee equal to the product of the Indenture
Trustee Fee Rate and the aggregate Scheduled Principal Balance of the Mortgage
Loans as of the first day of the related Due Period.
"Indenture Trustee Fee Rate": One-twelfth of 0.005%.
"Independent": When used with respect to any specified Person, means such
a Person who (i) is in fact independent of the Issuer and any other obligor
upon the Notes, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer or in any such other
obligor or in an Affiliate of the Issuer or such other obligor, and (iii) is
not connected with the Issuer or any such other obligor as an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be furnished to the
Indenture Trustee, such Person shall be appointed by an Issuer Order and such
opinion or certificate shall state that the signer has read this definition
and that the signer is Independent within the meaning hereof.
"Individual Note": A Note of an original principal amount of $50,000
(provided, however, one Note may be less than that amount); a Note of an
original principal amount in excess of $50,000 shall be deemed to be a number
of Individual Notes equal to the quotient obtained by dividing such original
principal amount by $50,000.
"Initial Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement, dated as of April 1, 1999, between the Initial Seller, as seller,
and the Seller, as purchaser, with respect to the Mortgage Loans.
"Initial Redemption Date": The first Payment Date on which the aggregate
Principal Balance of the Mortgage Loans is less than 20% of their Cut-off Date
Principal Balance.
"Initial Seller": AmREIT and its successors and assigns.
"Indemnification Agreement": The Indemnification Agreement dated as of
April 9, 1999 among the Note Insurer, AmREIT, the Seller, the Issuer, the
Depositor and the Underwriter.
"Insurance Policy": As defined in the Master Servicing Agreement.
"Insured Expenses": As defined in the Master Servicing Agreement.
"Insurance Proceeds": As defined in the Master Servicing Agreement.
"Interest Accrual Period": With respect to any Payment Date, the period
from the Payment Date in the month preceding the month of such Payment Date
(or, in the case of the first Payment Date, from the Closing Date) through the
day before such Payment Date.
"Investor Certificate": As defined in the Trust Agreement.
"Investor Certificateholder": As defined in the Trust Agreement.
"Issuer": American Residential Eagle Bond Trust 1999-1, a Delaware
business trust.
"Issuer Order" and "Issuer Request": A written order or request of the
Issuer signed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee or, in the case of such order or request required by Section 2.11, by
an Authorized Officer of the holder of the Investor Certificate and delivered
to the Indenture Trustee or the Authenticating Agent, as applicable.
"Letter Agreement": The Letter of Representations to The Depository Trust
Company from the Indenture Trustee and the Issuer dated April 14, 1999.
"LIBOR Business Day": Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York or in the
city of London, England are required or authorized by law to be closed.
"XXXXX Xxxxxxxxx Amount": With respect to any Payment Date, the sum of
(i) the excess, if any, of the Monthly Interest Amount calculated on the basis
of the Note Interest Rate (with regard to the CAP Rate but without regard to
the Net Funds Cap applicable to such Payment Date) over the sum of (a) related
Monthly Interest Amount calculated on the basis of the Net Funds Cap and (b)
the Supplemental Interest Payment (if any) for such Payment Date, (ii) any
LIBOR Carryover Amount remaining unpaid from prior Payment Dates and (iii)
interest on the amount in clause (ii) calculated on the basis of the Note
Interest Rate (with regard to the CAP Rate but without regard to the Net Funds
Cap applicable to such Payment Date).
"LIBOR Determination Date": With respect to any Payment Date, the second
LIBOR Business Day prior to the first day of the relate Interest Accrual
Period (or the second LIBOR Business Day prior to the Closing Date, in the
case of the first Payment Date).
"Liquidated Mortgage Loan": As defined in the Master Servicing Agreement.
"Liquidation Date": With respect to any Mortgage Loan, the date of the
final receipt of all Liquidation Proceeds, Insurance Proceeds or other
payments with respect to such Mortgage Loan.
"Liquidation Proceeds": As defined in the Master Servicing Agreement.
"Loan-To-Value Ratio": As defined in the Master Servicing Agreement.
"Manager": means AmREIT as manager of the Issuer under the Management
Agreement and its successors and assigns.
"Management Agreement": The management agreement dated as of April 1,
1999 between the Issuer and XxXXXX, as manager.
"Management Fee": With respect to any Payment Date, the monthly fee of
$1,000 payable to AmREIT, as manager under the Management Agreement.
"Management Fee Rate": With respect to any Payment Date, the Management
Fee expressed as a percentage of the Aggregate Principal Balance as of the
last day of the Due Period preceding such Payment Date.
"Master Servicer": As defined in the Master Servicing Agreement.
"Master Servicing Agreement": The Master Servicing Agreement dated as of
April 1, 1999 among the Issuer, Advanta Mortgage Corp. USA, as Master
Servicer, and the Indenture Trustee.
"Master Servicing Fee": As defined in the Master Servicing Agreement.
"Master Servicing Fee Rate": As defined in the Master Servicing
Agreement.
"Maturity": With respect to any Note, the date on which the entire unpaid
principal amount of such Note becomes due and payable as therein or herein
provided, whether at the Final Maturity Date or by declaration of
acceleration, call for redemption or otherwise.
"Minimum Spread": 0.00% for the first fifteen Payment Dates, 0.50% from
the sixteenth Payment Date to the sixtieth Payment Date and 0.75% thereafter.
"Monthly Advance": As defined the Master Servicing Agreement.
"Monthly Interest Amount": With respect to any Payment Date, an amount
equal to interest accrued during the related Interest Accrual Period at the
Note Interest Rate on the Note Balance as of the preceding Payment Date (after
giving effect to payments, if any, in reduction of principal made on the Notes
on such preceding Payment Date), minus any Relief Act Shortfalls.
"Monthly Payment": As defined in the Master Servicing Agreement.
"Monthly Principal Amount": With respect to any Payment Date, an amount
equal to (A) the aggregate of (i) all scheduled payments of principal received
with respect to the Mortgage Loans due during the related Due Period and all
other amounts collected, received or otherwise recovered in respect of
principal on such Mortgage Loans (including Principal Prepayments) during or
in respect of the related Collection Period, and (ii) the aggregate of all
amounts allocable to principal deposited in the Note Payment Account on the
related Remittance Date by the Initial Seller, the Seller or the Master
Servicer in connection with a repurchase, release, removal or substitution of
any such Mortgage Loans pursuant to the Master Servicing Agreement, reduced by
(B) the amount of any Overcollateralization Surplus with respect to such
Payment Date.
"Moody's": Xxxxx'x Investors Service, Inc. and its successors in
interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple in real property securing a Mortgage
Loan.
"Mortgage Insurance Policy": The primary mortgage insurance policy issued
by the Mortgage Insurer insuring certain of those Mortgage Loans with original
Loan-to-Value ratios in excess of 80% as indicated in the schedule to such
policy.
"Mortgage Insurance Premium": With respect to any Payment Date, the
aggregate monthly premiums payable with respect to the Mortgage Loans covered
by the Mortgage Insurance Policy.
"Mortgage Insurance Premium Rate": With respect to any Payment Date, the
Mortgage Insurance Premium expressed as an annual percentage of the Aggregate
Principal Balance as of the last day of the Due Period preceding such Payment
Date.
"Mortgage Insurer": Commonwealth Mortgage Assurance Company and its
successors and assigns.
"Mortgage Loan": Each of the mortgage loans Granted to the Indenture
Trustee under this Indenture as security for the Notes and that from time to
time comprise part of the Trust Estate, including any property that secures a
Mortgage that becomes REO Property. The Mortgage Loans are listed on the
Schedule of Mortgage Loans annexed hereto as Schedule I.
"Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase Agreement,
dated as of April 1, 1999, by and between the Seller, as seller, and the
Depositor, as purchaser.
"Mortgage Note": The note or other instrument evidencing the indebtedness
of a Mortgagor under the related Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans.
"Mortgaged Property": The underlying property securing a Mortgage Note.
"Mortgage Rate": As defined in the Master Servicing Agreement.
"Mortgagor": The obligor under a Mortgage Note.
"Net Funds Cap": With respect to any Payment Date, (i) the average of the
Mortgage Rates of the Mortgage Loans as of the first day of the month
preceding the month of such Payment Date (or in the case of the first Payment
Date, the Cut-off Date), weighted on the basis of the Scheduled Principal
Balances of the Mortgage Loans as of such date minus (ii) the Aggregate
Expense Rate.
"Net Liquidation Proceeds": As defined in the Master Servicing Agreement.
"Nonrecoverable Advance": As defined in the Master Servicing Agreement.
"Note Balance": The Original Note Balance minus the aggregate of amounts
actually paid as principal to the Holders.
"Noteholder" or "Holder": The Person in whose name a Note is registered
in the Note Register, except that, solely for the purpose of taking any action
under Section 5.02 or giving of any consent pursuant to this Indenture, any
Note registered in the name of the Issuer, the Initial Seller, the Seller, the
Master Servicer or the Depositor or any Persons actually known by a
Responsible Officer of the Indenture Trustee to be an Affiliate of the Issuer,
the Initial Seller, the Seller, the Master Servicer or the Depositor shall be
deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether Holders of the
requisite Percentage Interests necessary to take any such action or effect any
such consent have acted or consented unless the Issuer, the Initial Seller,
the Seller, the Master Servicer, the Depositor or any such Person is an owner
of record of all of the Notes.
"Note Insurance Premium": With respect to any Payment Date, the monthly
premium as set forth in the Premium Letter to be paid to the Note Insurer.
"Note Insurance Premium Rate": With respect to any Payment Date, the rate
specified in the Premium Letter.
"Note Insurer": Financial Security Assurance Inc., a New York stock
insurance company, and successors thereto.
"Note Insurer Default" shall mean any one of the following events shall
have occurred and be continuing:
(a) The Note Insurer fails to make a payment required under the FSA
Policy in accordance with its terms;
(b) The Note Insurer (A) files any petition or commences any case or
proceeding under any provision or chapter of the Bankruptcy Code or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (B) makes a general
assignment for the benefit of its creditors, or (C) has an order for
relief entered against it under the Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority enters a final and
nonappealable order, judgment or decree (1) appointing a custodian,
trustee, agent or receiver for the Note Insurer or for all or any
material portion of its property or (2) authorizing the taking of
possession by a custodian, trustee, agent or receiver of the Note Insurer
(or the taking of possession of all or any material portion of the
property of the Note Insurer).
"Note Interest Rate": With respect to any Payment Date, a per annum rate
equal to the least of (i) the Formula Rate, (ii) the CAP Rate and (iii) the
Net Funds Cap. Interest in respect of any Payment Date will accrue during the
related Interest Accrual Period on the basis of a 360-day year and the actual
number of days elapsed during such period.
"Note Margin": 0.35% on or prior to the Initial Redemption Date and 0.70%
after the Initial Redemption Date.
"Note Payment Account": The segregated trust account, which shall be an
Eligible Account, established and maintained pursuant to Section 8.02 and
entitled "Norwest Bank Minnesota, National Association, as Indenture Trustee
for American Residential Eagle Bond Trust 1999-1 Mortgage-Backed LIBOR Notes,
Class A, Series 1999-1, Note Payment Account," on behalf of the Noteholders
and the Note Insurer.
"Note Register": As defined in Section 2.06.
"Note Registrar": As defined in Section 2.06.
"Notes": The American Residential Eagle Bond Trust 1999-1 Mortgage-Backed
LIBOR Notes, Class A, Series 1999-1.
"Notice Of Claim": The notice required to be furnished by the Indenture
Trustee to the Note Insurer in the event an Insured Payment is required to be
paid under the FSA Policy with respect to any Payment Date, in the form set
forth as Exhibit C hereto.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, Chief Operating Officer
or a Vice President of the Seller, the Depositor, the Master Servicer or, in
the case of the Issuer, an Authorized Officer of the Owner Trustee or of its
Manager (to the extent the delivery of such certificates by the Manager is
permitted under the Management Agreement), as the case may be, and delivered
to the Indenture Trustee, Note Insurer or each Rating Agency, as the case may
be.
"One-Month LIBOR": With respect to each Payment Date, the rate for one
month United States dollar deposits quoted on Telerate Page 3750 as of 11:00
A.M., London time, on the related LIBOR Determination Date. If such rate does
not appear on such page (or other page as may replace that page on that
service, or if such service is no longer offered, such other service for
displaying LIBOR or comparable rates as may be reasonably selected by the
Manager), the rate shall be the Reference Bank Rate. The "Reference Bank Rate"
shall be determined on the basis of the rates at which deposits in U.S.
Dollars are offered by the reference banks (which shall be three major banks
that are engaged in transactions in the London interbank market, selected by
the Manager) as of 11:00 A.M. London time, on the date that is two LIBOR
Business Days prior to the immediately preceding Payment Date to prime banks
in the London interbank market for a period of one month in amounts
approximately equal to the Note Balance then outstanding. The Indenture
Trustee shall request the principal London office of each of the reference
banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate shall be the arithmetic mean (rounding such arithmetic mean
upwards, if necessary, to the nearest whole multiple of 1/16%) of the
quotations. If on such date fewer than two quotations are provided as
requested, the rate shall be the arithmetic mean (rounding such arithmetic
mean upwards, if necessary, to the nearest whole multiple of 1/16%) of the
rates quoted by one or more major banks in New York City, selected by the
Manager as of 11:00 A.M., New York City time, on such date for loans in U.S.
Dollars to leading European banks for a period of one month in amounts
approximately equal to the Note Balance then outstanding. If no such
quotations can be obtained, the rate shall be LIBOR for the prior Payment
Date.
"Opinion Of Counsel": A written opinion of counsel reasonably acceptable
to the Indenture Trustee and, in the case of opinions delivered to the Note
Insurer, reasonably acceptable to it. Any expense related to obtaining an
Opinion of Counsel for an action requested by a party shall be borne by the
party required to obtain such opinion or seeking to effect the action that
requires the delivery of such Opinion of Counsel, except in such instances
where such opinion is at the request of the Indenture Trustee, in which case
such expense shall be an expense of the Issuer.
"Original Note Balance": The principal balance of the Notes at the issue
date thereof, equal to $229,000,000.
"Outstanding": As of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Definitive Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent (other than the Issuer) in trust for the
Holders of such Notes; provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor, satisfactory to the Indenture Trustee,
has been made;
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser (as defined by the Uniform Commercial
Code of the applicable jurisdiction); and
(iv) Notes alleged to have been destroyed, lost or stolen that have
been paid as provided for in Section 2.07;
provided, however, that in determining whether the Holders of the requisite
percentage of the Note Balance of the Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Issuer, any other obligor upon the Notes or any
Affiliate of the Issuer, the Indenture Trustee, the Initial Seller, the
Seller, the Master Servicer or the Depositor or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes or any Affiliate
of the Issuer, the Initial Seller, the Seller, the Master Servicer or the
Depositor or such other obligor; provided, further, however, that Notes that
have been paid with the proceeds of the FSA Policy shall be deemed to be
Outstanding for the purposes of this Indenture, such payment to be evidenced
by written notice from the Note Insurer to the Indenture Trustee, and the Note
Insurer shall be deemed to the Holder thereof to the extent of any payments
thereon made by the Note Insurer.
"Overcollateralization Amount": With respect to any Payment Date, the
amount, if any, by which (x) the aggregate Principal Balance of the Mortgage
Loans as of the end of the related Due Period exceeds (y) the Note Balance of
the Notes as of such Payment Date after taking into account payments of the
Monthly Principal Amount (disregarding any permitted reduction in Monthly
Principal Amount due to an Overcollateralization Surplus) made on such Payment
Date.
"Overcollateralization Deficit": The amount, if any, by which (x) the
Note Balance, after taking into account all payments to be made on such
Payment Date in reduction thereof, including any Excess Cash Payments, exceeds
(y) the aggregate Principal Balance of the Mortgage Loans as of the end of the
applicable Due Period.
"Overcollateralization Surplus": With respect to any Payment Date, the
amount, if any, by which (x) the Overcollateralization Amount for such Payment
Date exceeds (y) the then applicable Required Overcollateralization Amount for
such Payment Date.
"Owner Trustee": Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity, but solely as owner trustee under
the Trust Agreement, and any successor owner trustee thereunder.
"Paying Agent": The Indenture Trustee or any other depository institution
or trust company that is authorized by the Issuer pursuant to Section 3.03 to
pay the principal of, or interest on, any Notes on behalf of the Issuer, which
agent, if not the Indenture Trustee, shall have signed an instrument agreeing
to be bound by the terms of this Indenture applicable to the Paying Agent.
"Payment Date": The 25th day of each month or, if any such day is not a
Business Day, the Business Day immediately following such 25th day, beginning
May 25, 1999.
"Payment Date Statement": The statement prepared pursuant to Section
2.08(d) with respect to collections on or in respect of the Mortgage Loans and
other assets of the Trust Estate and payments on or in respect of the Notes,
based upon the information contained in the report prepared pursuant to
Section 3(i) of the Master Servicing Agreement and setting forth the following
information with respect to each Payment Date (to the extent the Master
Servicer has made such information (other than the information described in
clause (b) below) available to the Indenture Trustee):
(a) the amount of such payment to the Noteholders on the related
Payment Date allocable to (i) the Monthly Principal Amount (separately
setting forth Principal Prepayments) and (ii) any Excess Cash Payment;
(b) the amount of such payment to the Noteholders on such Payment
Date allocable to the Monthly Interest Amount;
(c) the Note Balance after giving effect to the payment of Monthly
Principal Amount and any Excess Cash applied to reduce the Note Balance
on such Payment Date;
(d) the Aggregate Principal Balance of the Mortgage Loans as of the
end of the related Due Period;
(e) the amount of Monthly Advances made with respect to such Payment
Date;
(f) the number and the aggregate of the Principal Balances of the
Mortgage Loans Delinquent (i) one month, (ii) two months and (iii) three
or more months as of the end of the related Collection Period;
(g) the aggregate of the Principal Balances of the Mortgage Loans in
foreclosure or other similar proceeding or in which the borrower is in
bankruptcy and the book value of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure during the related
Collection Period as of the last day of such Collection Period;
(h) the aggregate of the Principal Balances of the Mortgage Loans
repurchased by the Initial Seller, the Seller or the Issuer, separately
setting forth the aggregate of the Principal Balances of Mortgage Loans
Delinquent for three consecutive monthly installments purchased by the
Issuer at its option pursuant to the Indenture;
(i) the Insured Payment, if any, for such Payment Date;
(j) the amount of the Master Servicing Fee paid to or retained by
the Master Servicer with respect to such Payment Date;
(k) the Overcollateralization Amount, the then applicable Required
Overcollateralization Amount, the Overcollateralization Surplus, if any,
and the Overcollateralization Deficit, if any, with respect to such
Payment Date;
(l) the aggregate outstanding principal balance of the three largest
outstanding Mortgage Loans;
(m) the Weighted Average Net Mortgage Rate on the Mortgage Loans as
of the first day of the month prior to the Payment Date;
(n) the Aggregate Expense Rate with respect to such Payment Date;
(o) the Note Interest Rate for such Payment Date;
(p) the amount of any Supplemental Interest Payment made by the Note
Insurer on such Payment Date and deposited in the Supplemental Interest
Payment Account; and
(q) the Step Down Cumulative Loss Test, the Step Down Rolling
Delinquency Test, the Step Down Rolling Loss Test, the Step Down Trigger,
the Stepped Down Required Overcollateralized Percentage, the Step Up
Cumulative Loss Test, the Step Up MI Trigger, the Step Up Rolling
Delinquency Test, the Step Up Rolling Loss Test and the Step Up Trigger
for such Payment Date and the percentage difference (if any) between the
calculated percentage and the threshold or trigger percentage specified
in such test or trigger event.
In the case of information furnished pursuant to clauses (a) and (b)
above, the amounts shall be expressed as a dollar amount per Note with a
$1,000 principal denomination. In addition, for each Payment Date, the
Indenture Trustee shall also be required to provide the Underwriter and
Bloomberg Financial Services a loan level amortization tape in standard
industry format.
"Percentage Interest": With respect to a Note, the undivided percentage
interest (carried to eight places rounded down) obtained by dividing the
original principal balance of such Note by the Original Note Balance and
multiplying the result by 100.
"Permitted Investments": As defined in the Master Servicing Agreement.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association joint-stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Policy Payments Account": The special purpose trust account established
by the Indenture Trustee pursuant to Section 8.03(b) hereof.
"Predecessor Notes": With respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note.
"Preference Amount": Any amount previously distributed to a Noteholder
that is recoverable and sought to be recovered as a avoidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with a
final nonappealable order of a court having competent jurisdiction.
"Premium Letter": The premium letter dated April 15, 1999 between the
Initial Seller and the Note Insurer.
"Prepayment Interest Shortfall": As defined in the Master Servicing
Agreement.
"Principal Balance": As to any Mortgage Loan and any Determination Date,
the actual outstanding principal amount thereof as of the close of business on
the Determination Date in the preceding month (or, in the case of the first
Payment Date, as of the Cut-off Date) less (i) all scheduled payments of
principal received) with respect to the Mortgage Loan and due during the
related Due Period and all other amounts collected, received or otherwise
recovered in respect of principal on the Mortgage Loan (including Principal
Prepayments) during or in respect of the related Collection Period, Net
Liquidation Proceeds allocable to principal recovered or collected in respect
of such Mortgage Loan during the related Collection Period and (ii) the
portion of the Purchase Price allocable to principal to be remitted by the
Initial Seller to the Indenture Trustee on or prior to the related Deposit
Date in connection with a repurchase of such Mortgage Loan pursuant to the
Sale Agreements, Master Servicing Agreement or Section 8.05 hereof, to the
extent such amount is actually remitted on or prior to such Deposit Date;
provided, however, that Mortgage Loans that have become Liquidated Mortgage
Loans since the end of the preceding Determination Date (or, in the case of
the first Determination Date, since the Cut-off Date) will be deemed to have a
Principal Balance of zero on the current Determination Date.
"Principal Prepayment": As defined in the Master Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Price": As defined in the Master Servicing Agreement.
"Purchase and Sale Agreements": As defined in the Master Servicing
Agreement.
"Rating Agencies": Standard & Poor's and Moody's (each, a "Rating
Agency"). If either such agency or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical credit rating
agency, or other comparable Person, designated by the Master Servicer, notice
of which designation shall be given to the Indenture Trustee.
"Realized Loss": As defined in the Master Servicing Agreement.
"Record Date": With respect to any Payment Date, the date on which the
Persons entitled to receive any payment of principal of or interest on any
Notes (or notice of a payment in full of principal) due and payable on such
Payment Date are determined; such date shall be the last Business Day
preceding such Payment Date or, with respect to Definitive Notes, the last
Business Day of the month preceding the month of such Payment Date. With
respect to a vote of Noteholders required or allowed hereunder, the Record
Date shall be the later of (i) 30 days prior to the first solicitation of
consents or (ii) the date of the most recent list of Noteholders furnished to
the Indenture Trustee pursuant to Section 7.01(a) prior to such solicitation.
"Redemption Date": The Payment Date, if any, on which the Notes are
redeemed pursuant to Article X hereof which date may occur (i) on the Initial
Redemption Date or (ii) after the Indenture Trustee has received an acceptable
offer to purchase the Trust Estate as set forth in Section 10.01(c) hereof.
"Redemption Price": An amount at least equal to the sum of (i) 100% of
the then outstanding Note Balance, plus accrued interest thereon through the
end of the Interest Accrual Period immediately preceding the related Payment
Date, (ii) any amounts due and owing to the Note Insurer under the Insurance
Agreement (including any amounts that will become due as a result of such
redemption), (iii) any unreimbursed Master Servicing Fees, Monthly Advances
and Servicing Advances, including Nonrecoverable Advances and (iv) all unpaid
fees and expenses of, and other amounts due and owing to, the Owner Trustee
and the Indenture Trustee.
"Relief Act Shortfalls": With respect to any Due Period, the aggregate
reductions in interest collected on the Mortgage Loans as a result of The
Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
"Remittance Amount": As defined in the Master Servicing Agreement.
"Remittance Date": The date each month on which funds on deposit in the
Collection Account are remitted by the Master Servicer to the Indenture
Trustee for deposit into the Note Payment Account, which date shall be with
respect to any Payment Date, the 18th day of the month in which such Payment
Date occurs, or the next succeeding Business Day, if such 18th day is not a
Business Day.
"REO Property": As defined in the Master Servicing Agreement.
"Replacement Mortgage Loan": As defined in the Master Servicing
Agreement.
"Required Overcollateralization Amount": With respect to any Payment
Date, an amount equal to 2.25% of the Cut-off Date Aggregate Principal Balance
of the Mortgage Loans, subject to the following: (i) if the Step Up Trigger
has occurred, the Required Overcollateralization Amount for such Payment Date
will be an amount equal to either (A) if the Step Up Trigger has occurred
solely because the Step Up Rolling Delinquency Trust is met on such Payment
Date, an amount equal to the aggregate Principal Balance of all Mortgage Loans
that are 60 or more days Delinquent, or in foreclosure or have been converted
to REO Properties or (B) in all other cases, the Aggregate Principal Balance
of the Mortgage Loans as of the end of the related Due Period; (ii) if the
Spread Squeeze Condition is met, the Required Overcollateralization Amount for
such Payment Date will be an amount equal to the sum of (A) the Required
Overcollateralization Amount for such Payment Date determined as though the
Spread Squeeze Condition were not met plus (B) the Spread Squeeze
Overcollateralization Increase Amount or (ii) if neither the Step Up Trigger
has occurred nor the Spread Squeeze Condition is met but the Step Down Trigger
has occurred, the Required Overcollateralization Amount for such Payment Date
will be an amount equal to the greater of (A) 0.50% of the Cut-off Date
Aggregate Principal Balance of the Mortgage Loans and (B) the lesser of (x)
2.25% of the Cut-off Date Aggregate Principal Balance of the Mortgage Loans,
and (y) the Stepped Down Required Overcollateralized Percentage of the
aggregate Principal Balance of the Mortgage Loans and REO Properties as of the
end of the related Due Period. Notwithstanding, any provision to the contrary
contained herein, the Required Overcollateralization Amount may be reduced by
the Note Insurer.
"Required Payment Amount": With respect to any Payment Date, the Monthly
Interest Amount (net of Prepayment Interest Shortfalls which are not covered
by Compensating Interest Payments) for such Payment Date plus the amount of
any Overcollateralization Deficit for such Payment Date.
"Responsible Officer": With respect to the Indenture Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, any assistant vice president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, the cashier,
any trust officer or assistant trust officer, the controller, any assistant
controller or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Rolling Delinquency Percentage": With respect to any Payment Date, the
average of the Delinquency Percentages as of the last day of each of the three
(or one or two, in the case of the first or second Payment Dates,
respectively) preceding Due Periods.
"Sale": The meaning specified in Section 5.17.
"Sale Agreements": The Initial Mortgage Loan Purchase Agreement together
with the Mortgage Loan Purchase Agreement.
"Schedule of Mortgage Loans": As defined in the Master Servicing
Agreement.
"Scheduled Payments": As defined in the FSA Policy.
"Scheduled Principal Balance": (i) with respect to any Mortgage Loan as
of any Payment Date, the principal balance of such Mortgage Loan at the close
of business on the Cut-off Date, after giving effect to principal payments due
on or before the Cut-off Date, whether or not received, less an amount equal
to principal payments due after the Cut-off Date and on or before the Due Date
in the related Due Period, whether or not received from the mortgagor, and all
amounts allocable to unscheduled principal payments (including Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds and condemnation
proceeds, in each case to the extent identified and applied prior to or during
the Collection Period ending in the month prior to the month of such Payment
Date) and (ii) with respect to any REO Property as of any Payment Date, the
Scheduled Principal Balance of the related Mortgage Loan on the Due Date
immediately preceding the date of acquisition of such REO Property by the
Master Servicer (reduced by any amount applied as a reduction of principal on
the Mortgage Loan).
"Seller": American Residential Eagle, Inc., a Delaware corporation.
"Servicing Advance": As defined in the Master Servicing Agreement.
"Servicing Fee Rate": As defined in the Master Servicing Agreement.
"Spread Squeeze Condition": The Spread Squeeze Condition will be met with
respect to a Payment Date following the fourteenth Payment Date if, with
respect to the fifteenth Payment Date through the twenty-seventh Payment Date,
the Spread Squeeze Percentage for such Payment Date is less than 2.00% and for
any Payment Date after the twenty-seventh Payment Date, the Spread Squeeze
Percentage for such Payment Date is less than 2.75%.
"Spread Squeeze Overcollateralization Increase Amount": For any Payment
Date on which the Spread Squeeze Condition is met, an amount equal to the
product obtained by multiplying (i) three, (ii) the excess, if any, of 2.00%
(with respect to the fifteenth Payment Date through the twenty-seventh Payment
Date) or 2.75% (with respect to any Payment Date after the twenty-seventh
Payment Date) over the Spread Squeeze Percentage for such Payment Date and
(iii) the Cut-off Date Aggregate Principal Balance of the Mortgage Loans.
"Spread Squeeze Percentage": With respect to any Payment Date, the
percentage equivalent of a fraction, the numerator of which is the product of
12 and the Excess Cash for such Distribution Date, and the denominator of
which is the aggregate Principal Balance of the Mortgage Loans as of such
Payment Date.
"Standard & Poor's": Standard & Poor's Rating Services, a Division of The
XxXxxx-Xxxx Companies, Inc., and its successors in interest.
"Step Down Cumulative Loss Test": The Step Down Cumulative Loss Test will
be met with respect to a Payment Date as follows: (i) for the 31st through the
41st Payment Dates, if the Cumulative Loss Percentage for such Payment Date is
1.65% or less; (ii) for the 42nd through the 53rd Payment Dates, if the
Cumulative Loss Percentage for such Payment Date is 2.15% or less; (iii) for
the 54th through the 65th Payment Dates, if the Cumulative Loss Percentage for
such Payment Date is 2.55% or less; (iv) for 66th through the 77th Payment
Dates, if the Cumulative Loss Percentage for such Payment Date is 2.90% or
less; and (v) after the 77th Payment Date, if the Cumulative Loss Percentage
for such Payment Date is 3.50% or less.
"Step Down Rolling Delinquency Test": The Step Down Rolling Delinquency
Test will be met with respect to a Payment Date if the Rolling Delinquency
Percentage for such Distribution Date is 10.00% or less.
"Step Down Rolling Loss Test": The Step Down Rolling Loss Test will be
met with respect to a Payment Date if the Annual Loss Percentage is less than
0.80%.
"Step Down Trigger": For any Payment Date after the 30th Payment Date,
the Step Down Trigger will have occurred if each of the Step Down Cumulative
Loss Test, the Step Down Rolling Delinquency Test and the Step Down Rolling
Loss Test is met. In no event will the Step Down Trigger be deemed to have
occurred for the 30th Payment Date or any preceding Payment Date.
"Stepped Down Required Overcollateralized Percentage": For any Payment
Date for which the Step Down Trigger has occurred, a percentage equal to (i)
the percentage equivalent of a fraction, the numerator of which is 2.25% of
the Cut-off Date Aggregate Principal Balance of the Mortgage Loans, and the
denominator of which is the aggregate Principal Balance of the Mortgage Loans
as of the end of the immediately preceding Due Period, minus (ii) the
percentage equivalent of a fraction, the numerator of which is the product of
(A) the percentage calculated under clause (i) above minus 4.50%, multiplied
by (B) the number of consecutive Payment Dates through and including the
Payment Date for which the Stepped Down Required Overcollateralized Percentage
is being calculated, up to a maximum of three, for which the Step Down Trigger
has occurred, and the denominator of which is three.
"Step Up Cumulative Loss Test": The Step Up Cumulative Loss Test will be
met with respect to a Payment Date as follows: (i) for the 1st through the
12th Payment Dates, if the Cumulative Loss Percentage for such Payment Date is
more than 0.85%; (ii) for the 13th through the 24th Payment Dates, if the
Cumulative Loss Percentage for such Payment Date is more than 1.20%; (iii) for
the 25th through the 36th Payment Dates, if the Cumulative Loss Percentage for
such Payment Date is more than 1.95%; (iv) for the 37th through the 48th
Payment Dates, if the Cumulative Loss Percentage for such Payment Date is more
than 2.75%; (v) for the 49th through the 60th Payment Dates, if the Cumulative
Loss Percentage for such Payment Date is more than 3.30% and (vi) for the 61st
Payment Date and any Payment Date thereafter, if the Cumulative Loss
Percentage for such Payment Date is more than 4.10%.
"Step Up MI Trigger": For any Payment Date, the Step Up MI Trigger will
be met if either (i) the rating assigned to the Mortgage Insurer is withdrawn
by either Rating Agency or reduced below "AA-" or "Aa3" by S&P or Xxxxx'x,
respectively, or the cumulative amount of claim denials under the Mortgage
Insurance Policy exceeds either (i) 0.45% of the Cut-off Date Aggregate
Principal Balance, if the current Aggregate Principal Balance of the Mortgage
Loans is greater than or equal to 50% of the Cut-off Date Aggregate Principal
Balance or (ii) 1.15% of the current Pool Balance, if the Aggregate Principal
Balance of the Mortgage Loans is less than 50% of the Cut-off Date Aggregate
Principal Balance.
"Step Up Rolling Delinquency Test": The Step Up Rolling Delinquency Test
will be met with respect to a Payment Date if the Rolling Delinquency
Percentage for such Payment Date is more than 12%.
"Step Up Rolling Loss Test": The Step Up Rolling Loss Test will be met
with respect to a Payment Date, if the Annual Loss Percentage is more than
1.10%.
"Step Up Trigger": For any Payment Date, the Step Up Trigger will have
occurred if any one of the Step Up Cumulative Loss Test, the Step Up Rolling
Delinquency Test, the Step Up Rolling Loss Test or Step Up MI Trigger is met.
"Supplemental Interest Payments": With respect to any Payment Date, the
amount due to the Note Insurer in respect of such Payment Date pursuant to the
Cap Agreement.
"Supplemental Interest Payment Account": The trust account established by
the Indenture Trustee pursuant to Section 8.02(b) of the Indenture.
"Telerate Page 3750": The display designated as page 3750 on the Telerate
Service (or such other page as may replace page 3750 on that service for the
purpose of displaying London interbank offered rates of major banks).
"Trust Agreement": That certain Deposit Trust Agreement, dated as of
April 1, 1999, between the Depositor and the Owner Trustee.
"Trust Estate": All money, instruments and other property subject or
intended to be subject to the lien of this Indenture for the benefit of the
Noteholders and the Note Insurer as of any particular time (including, without
limitation, all property and interests Granted to the Indenture Trustee,
including all proceeds thereof).
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it
may be amended from time to time.
"Trustee Mortgage Files": As defined in the Master Servicing Agreement.
"Trust Paying Agent": The entity appointed to act as paying agent
pursuant to the Trust Agreement with respect to amounts on deposit from time
to time in the Certificate Distribution Account and distributions thereof to
Certificateholders. The initial Trust Paying Agent is Norwest Bank Minnesota,
National Association.
"Underwriter": Bear, Xxxxxxx & Co. Inc.
"Vice President": Any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
ARTICLE II
THE NOTES
Section 2.01. Forms Generally.
The Notes shall be in substantially the form set forth on Exhibit A
attached hereto. Each Note may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the
Notes may be listed, or as may, consistently herewith, be determined by the
Issuer, as evidenced by its execution thereof. Any portion of the text of any
Note may be set forth on the reverse thereof with an appropriate reference on
the face of the Note.
The Definitive Notes may be produced in any manner determined by the
Issuer, as evidenced by its execution thereof.
Section 2.02. Forms Of Certificate Of Authentication.
The form of the Authenticating Agent's certificate of authentication is
as follows: This is one of the Notes referred to in the within-mentioned
Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Authenticating Agent
By:
----------------------------------
Authorized Signatory
Section 2.03. General Provisions With Respect To Principal And Interest
Payment.
The Notes shall be designated generally as the "Mortgage-Backed LIBOR
Notes, Class A, Series 1999-1" of the Issuer.
The aggregate principal amount of Notes that may be authenticated and
delivered under the Indenture is limited to $229,000,000, except for the Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of
this Indenture. The Notes shall consist of one class, having an Original Note
Balance of $229,000,000 and Final Maturity Date of April 25, 2029.
The Notes shall be issued in the form specified in Section 2.01.
Subject to the provisions of Section 3.01, Section 5.07, Section 5.09 and
Section 8.02(d), the principal of the Notes shall be payable in installments
ending no later than the Final Maturity Date unless the unpaid principal of
such Notes becomes due and payable at an earlier date by declaration of
acceleration or call for redemption or otherwise.
All payments made with respect to any Note shall be applied first to the
interest then due and payable on such Note and then to the principal thereof.
All computations of interest accrued on any Note shall be made on the basis of
a 360-day year and the actual number of days elapsed in the Interest Accrual
Period.
Interest on the Notes shall accrue at the Note Interest Rate during each
Interest Accrual Period on the Note Balance of each Outstanding Note at the
end of such Interest Accrual Period. Interest accrued during an Interest
Accrual Period shall be payable on the next following Payment Date.
All payments of principal of and interest on any Note shall be made in
the manner specified in Section 2.08.
Notwithstanding any of the foregoing provisions with respect to payments
of principal of and interest on the Notes, if the Notes have become or been
declared due and payable following an Event of Default and such acceleration
of maturity and its consequences have not been rescinded and annulled, then
payments of principal of and interest on the Notes shall be made in accordance
with Section 5.07.
Section 2.04. Denominations.
The Notes shall be issuable only as registered Notes in the minimum
denomination of $50,000 and integral multiples of $1 in excess thereof, with
the exception of one Note which may be issued in a lesser amount.
Section 2.05. Execution, Authentication, Delivery And Dating.
The Notes shall be executed on behalf of the Issuer by an Authorized
Officer of the Owner Trustee. The signature of such Authorized Officer of the
Owner Trustee on the Notes may be manual or by facsimile.
Notes bearing the manual or facsimile signature of an individual who was
at any time an Authorized Officer of the Owner Trustee shall bind the Issuer,
notwithstanding that such individual has ceased to be an Authorized Officer of
the Owner Trustee prior to the authentication and delivery of such Notes or
was not an Authorized Officer of the Owner Trustee at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes executed on behalf of the Issuer
to the Authenticating Agent for authentication; and the Authenticating Agent
shall authenticate and deliver such Notes as in this Indenture provided and
not otherwise.
Each Note authenticated on the Closing Date shall be dated the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
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 Authenticating Agent by the manual signature of one of its authorized
officers or employees, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated
and delivered hereunder.
Section 2.06. Registration, Registration Of Transfer And Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers
of Notes. The Indenture Trustee is hereby initially appointed "Note Registrar"
for the purpose of registering Notes and transfers of Notes as herein
provided. The Indenture Trustee shall remain the Note Registrar throughout the
term hereof. Upon any resignation of the Indenture Trustee, the Issuer shall
promptly appoint a successor, with the approval of the Note Insurer, or, in
the absence of such appointment, the Issuer shall assume the duties of Note
Registrar.
Upon surrender for registration of transfer of any Note at the office or
agency of the Note Registrar to be maintained as provided in Section 3.02, the
Owner Trustee on behalf of the Issuer, shall execute, and the Authenticating
Agent shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denominations, and of a like aggregate initial principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Owner Trustee shall
execute, and the Authenticating Agent shall authenticate and deliver, the
Notes that the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Note Registrar duly executed by the
Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer and the Note Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge as may be
imposed in connection with any registration of transfer or exchange of Notes.
Section 2.07. Mutilated, Destroyed, Lost Or Stolen Notes.
If (1) any mutilated Note is surrendered to the Note Registrar or the
Note Registrar receives evidence to its satisfaction of the destruction, loss
or theft of any Note, and (2) there is delivered to the Note Registrar such
security or indemnity as may be required by the Note Registrar to save each of
the Issuer, the Note Insurer and the Note Registrar harmless, then, in the
absence of notice to the Issuer or the Note Registrar that such Note has been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Issuer
shall execute and upon its request the Authenticating Agent shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Note, a new Note or Notes of the same tenor and aggregate initial
principal amount bearing a number not contemporaneously outstanding. If, after
the delivery of such new Note, a bona fide purchaser of the original Note in
lieu of which such new Note was issued presents for payment such original
Note, the Issuer and the Note Registrar shall be entitled to recover such new
Note from the person to whom it was delivered or any person taking therefrom,
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 expenses incurred by the Issuer or the Note Registrar in connection
therewith. If any such mutilated, destroyed, lost or stolen Note shall have
become or shall be about to become due and payable, or shall have become
subject to redemption in full, instead of issuing a new Note, the Issuer may
pay such Note without surrender thereof, except that any mutilated Note shall
be surrendered.
Upon the issuance of any new Note under this Section, the Issuer or the
Note Registrar may require the payment 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 or the Note Registrar) connected therewith.
Every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Issuer, whether or not the 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 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 2.08. Payments Of Principal And Interest.
(a) Payments on Notes issued as Book-Entry Notes will be made by or
on behalf of the Indenture Trustee to the Clearing Agency or its nominee. Any
installment of interest or principal payable on any Definitive Notes shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes)
is registered at the close of business on the Record Date for such Payment
Date by either (i) check mailed to such Person's address as it appears in the
Note Register on such Record Date, or (ii) by wire transfer of immediately
available funds to the account of a Noteholder, if such Noteholder (A) is the
registered holder of Definitive Notes having an initial principal amount of at
least $1,000,000 and (B) has provided the Indenture Trustee with wiring
instructions in writing by five Business Days prior to the related Record Date
or has provided the Indenture Trustee with such instructions for any previous
Payment Date, except for the final installment of principal payable with
respect to such Note (or the Redemption Price for any Note called for
redemption, if such redemption will result in payment of the then entire
unpaid principal amount of such Note), which shall be payable as provided in
subsection (b) below of this Section 2.08. A fee may be charged by the
Indenture Trustee to a Noteholder of Definitive Notes for any payment made by
wire transfer. Any installment of interest or principal not punctually paid or
duly provided for by the Issuer shall be payable as soon as funds are
available to the Indenture Trustee for payment thereof, or if Section 5.07
applies, pursuant to Section 5.07.
(b) All reductions in the principal amount of a Note (or one or more
Predecessor Notes) effected by payments of installments of principal made on
any Payment Date shall be binding upon all Holders of such Note and of any
Note issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof, whether or not such payment is noted on such Note. The
final installment of principal of each Note (including the Redemption Price of
any Note called for optional redemption, if such optional redemption will
result in payment of the entire unpaid principal amount of such Note) shall be
payable only upon presentation and surrender thereof on or after the Payment
Date therefor at the Indenture Trustee's presenting office located within the
United States of America pursuant to Section 3.02.
Whenever the Indenture Trustee expects that the entire remaining unpaid
principal amount of any Note will become due and payable on the next Payment
Date other than pursuant to a redemption pursuant to Article X, it shall, no
later than two days prior to such Payment Date, telecopy or hand deliver to
each Person in whose name a Note to be so retired is registered at the close
of business on such otherwise applicable Record Date a notice to the effect
that:
(i) the Indenture Trustee expects that funds sufficient to pay such
final installment will be available in the Note Payment Account on such
Payment Date; and
(ii) if such funds are available, (A) such final installment will be
payable on such Payment Date, but only upon presentation and surrender of
such Note at the office or agency of the Note Registrar maintained for
such purpose pursuant to Section 3.02 (the address of which shall be set
forth in such notice) and (B) no interest shall accrue on such Note after
such Payment Date.
A copy of such form of notice shall be sent to the Note Insurer by the
Indenture Trustee.
Notices in connection with redemptions of Notes shall be mailed to
Noteholders in accordance with Section 10.02.
(c) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal
and interest that were carried by such other Note. Any checks mailed pursuant
to subsection (a) of this Section 2.08 and returned undelivered shall be held
in accordance with Section 3.03.
(d) Each Payment Date Statement, prepared by the Indenture Trustee
based on the payment date statement delivered to the Indenture Trustee by the
Master Servicer pursuant to Section 2(h) of the Master Servicing Agreement,
shall be delivered by the Indenture Trustee to the Note Insurer, the Rating
Agencies, the Owner Trustee, the Underwriters and each Noteholder as the
statement required pursuant to Section 8.06. Neither the Indenture Trustee nor
the Paying Agent shall have any responsibility to recalculate, verify or
recompute information contained in any such tape, electronic data file or disk
or any such payment date statement delivered by the Master Servicer except to
the extent necessary to satisfy all obligations under this Section 2.08(d).
Within 90 days after the end of each calendar year, the Indenture Trustee
will be required to furnish to each person who at any time during the calendar
year was a Noteholder, if requested in writing by such person, a statement
containing the information set forth in subclauses (i) and (ii) of Payment
Date Statement, aggregated for such calendar year or the applicable portion
thereof during which such person was a Noteholder. Such obligation will be
deemed to have been satisfied to the extent that substantially comparable
information is provided pursuant to any requirements of the Code as are from
time to time in force.
Section 2.09. Persons Deemed Owner.
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Indenture Trustee, any Paying Agent and any other agent of the
Issuer, the Note Insurer or the Indenture Trustee may treat the Person in
whose name any Note is registered as the owner of such Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal
of and interest on such Note and (b) on any other date for all other purposes
whatsoever, and neither the Issuer, the Indenture Trustee, any Paying Agent
nor any other agent of the Issuer, the Note Insurer or the Indenture Trustee
shall be affected by notice to the contrary.
Section 2.10. Cancellation.
All Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Note Registrar,
be delivered to the Note Registrar and shall be promptly canceled by it. The
Issuer may at any time deliver to the Note Registrar for cancellation any Note
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Note Registrar. No Notes shall be authenticated in
lieu of or in exchange for any Notes canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Notes held by
the Note Registrar shall be held by the Note Registrar in accordance with its
standard retention policy, unless the Issuer shall direct by an Issuer Order
that they be destroyed or returned to it.
Section 2.11. Authentication And Delivery Of Notes.
The Notes shall be executed by an Authorized Officer of the Owner Trustee
on behalf of the Issuer and delivered to the Authenticating Agent for
authentication, and thereupon the same shall be authenticated and delivered by
the Authenticating Agent, upon Issuer Request and upon receipt by the
Authenticating Agent of all of the following:
(a) An Issuer Order authorizing the execution, authentication and
delivery of the Notes and specifying the Final Maturity Date, the principal
amount and the Note Interest Rate (or the manner in which such Note Interest
Rate is to be determined) of such Notes to be authenticated and delivered.
(b) An Issuer Order authorizing the execution and delivery of this
Indenture.
(c) One or more Opinions of Counsel addressed to the Authenticating
Agent and the Note Insurer or upon which the Authenticating Agent and the Note
Insurer is expressly permitted to rely, complying with the requirements of
Section 11.01, reasonably satisfactory in form and substance to the
Authenticating Agent and the Note Insurer.
In rendering the opinions set forth above, such counsel may rely upon
officer's certificates of the Issuer (or its Manager to the extent delivery of
such certificate by the Manager on behalf of the Issuer is permitted under the
Management Agreement), the Owner Trustee, the Master Servicer and the
Indenture Trustee, without independent confirmation or verification with
respect to factual matters relevant to such opinions. In rendering the
opinions set forth above, such counsel need express no opinion as to (A) the
existence of, or the priority of the security interest created by the
Indenture against, any liens or other interests that arise by operation of law
and that do not require any filing or similar action in order to take priority
over a perfected security interest or (B) the priority of the security
interest created by this Indenture with respect to any claim or lien in favor
of the United States or any agency or instrumentality thereof (including
federal tax liens and liens arising under Title IV of the Employee Retirement
Income Security Act of 1974).
The acceptability to the Note Insurer of the Opinion of Counsel delivered
to the Indenture Trustee and the Note Insurer at the Closing Date shall be
conclusively evidenced by the delivery on the Closing Date of the FSA Policy.
(d) An Officers' Certificate of the Issuer (or its Manager)
complying with the requirements of Section 11.01 and stating that:
(i) the Issuer is not in Default under this Indenture and the
issuance of the Notes will not result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, the Issuer's
Certificate of Trust or any indenture, mortgage, deed of trust or other
agreement or instrument to which the Issuer is a party or by which it is
bound, or any order of any court or administrative agency entered in any
proceeding to which the Issuer is a party or by which it may be bound or
to which it may be subject, and that all conditions precedent provided in
this Indenture relating to the authentication and delivery of the Notes
have been complied with;
(ii) the Issuer is the owner of each Mortgage Loan, free and
clear of any lien, security interest or charge, has not assigned any
interest or participation in any such Mortgage Loan (or, if any such
interest or participation has been assigned, it has been released) and
has the right to Grant each such Mortgage Loan to the Indenture Trustee;
(iii) the information set forth in the Schedule of Mortgage
Loans attached as Schedule I to this Indenture is correct;
(iv) the Issuer has Granted to the Indenture Trustee all of its
right, title and interest in each Mortgage Loan;
(v) as of the Closing Date, no lien in favor of the United
States described in Section 6321 of the Code, or lien in favor of the
Pension Benefit Guaranty Corporation described in Section 4068(a) of the
Employee Retirement Income Security Act of 1974, as amended, has been
filed as described in subsections 6323(f) and 6323(g) of the Code upon
any property belonging to the Issuer; and
(vi) attached thereto is a true and correct copy of letters
signed by each Rating Agency confirming that the Notes have been rated in
the highest rating category of such Rating Agency.
(e) An executed counterpart of the Master Servicing Agreement.
(f) Executed counterparts of the Sale Agreements.
(g) An executed counterpart of the Trust Agreement.
(h) The Mortgage Insurance Policy as issued by the Mortgage Insurer.
(i) The FSA Policy as issued by the Note Insurer.
(j) An executed counterpart of the Cap Agreement.
Section 2.12. Book-Entry Note.
The Notes will be issued initially as one or more certificates in the
name of the Cede & Co., as nominee for the Clearing Agency maintaining
book-entry records with respect to ownership and transfer of such Notes, and
registration of the Notes may not be transferred by the Note Registrar except
upon Book-Entry Termination. In such case, the Note Registrar shall deal with
the Clearing Agency as representatives of the Beneficial Owners of such Notes
for purposes of exercising the rights of Noteholders hereunder. Each payment
of principal of and interest on a Book-Entry Note shall be paid to the
Clearing Agency, which shall credit the amount of such payments to the
accounts of its Clearing Agency Participants in accordance with its normal
procedures. Each Clearing Agency Participant shall be responsible for
disbursing such payments to the Beneficial Owners of the Book-Entry Notes that
it represents and to each indirect participating brokerage firm (a "brokerage
firm" or "indirect participating firm") for which it acts as agent. Each
brokerage firm shall be responsible for disbursing funds to the Beneficial
Owners of the Book-Entry Notes that it represents. All such credits and
disbursements are to be made by the Clearing Agency and the Clearing Agency
Participants in accordance with the provisions of the Notes. None of the
Indenture Trustee, the Note Registrar, the Issuer, any Paying Agent or the
Note Insurer shall have any responsibility therefor except as otherwise
provided by applicable law. Requests and directions from, and votes of, such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Beneficial Owners.
Section 2.13. Termination Of Book Entry System.
(a) The book-entry system through the Clearing Agency with respect
to the Book-Entry Notes may be terminated upon the happening of any of the
following:
(i) The Clearing Agency advises the Indenture Trustee that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities as nominee and depositary with respect to the Notes and
the Indenture Trustee is unable to locate a qualified successor clearing
agency satisfactory to the Issuer;
(ii) The Issuer, in its sole discretion, elects to terminate
the book-entry system by notice to the Clearing Agency and the Indenture
Trustee; or
(iii) After the occurrence of an Event of Default (at which
time the Indenture Trustee shall use all reasonable efforts to promptly
notify each Beneficial Owner through the Clearing Agency of such Event of
Default), the Beneficial Owners of no less than 51% of the Note Balance
of the Book-Entry Notes advise the Indenture Trustee in writing, through
the related Clearing Agency Participants and the Clearing Agency, that
the continuation of a book-entry system through the Clearing Agency to
the exclusion of any Definitive Notes being issued to any person other
than the Clearing Agency or its nominee is no longer in the best
interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a)
above, the Indenture Trustee shall use all reasonable efforts to notify all
Beneficial Owners, through the Clearing Agency, of the occurrence of such
event and of the availability of Definitive Notes to Beneficial Owners
requesting the same, in an aggregate Current Note Balance representing the
interest of each, making such adjustments and allowances as it may find
necessary or appropriate as to accrued interest and previous calls for
redemption. Definitive Notes shall be issued only upon surrender to the
Indenture Trustee of the global Note by the Clearing Agency, accompanied by
registration instructions for the Definitive Notes. Neither the Issuer nor 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 issuance of the Definitive Notes, all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall cease to be applicable and the provisions relating to Definitive Notes
shall be applicable.
ARTICLE III
COVENANTS
Section 3.01. Payment Of Notes.
The Issuer will pay or cause to be duly and punctually paid the principal
of, and interest on, the Notes in accordance with the terms of the Notes and
this Indenture. The Notes shall be non-recourse obligations of the Issuer and
shall be limited in right of payment to amounts available from the Trust
Estate as provided in this Indenture and the Issuer shall not otherwise be
liable for payments on the Notes. No person (including the Note Registrar, the
Paying Agent, if any, the Indenture Trustee and, except to the extent provided
by the FSA Policy, the Note Insurer) shall be personally liable for any
amounts payable under the Notes. If any other provision of this Indenture
conflicts or is deemed to conflict with the provisions of this Section 3.01,
the provisions of this Section 3.01 shall control.
Section 3.02. Maintenance Of Office Or Agency.
The Issuer will cause the Note Registrar to maintain its corporate trust
office at a location where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served.
The Issuer may also from time to time at its own expense designate one or
more other offices or agencies within the United States of America where the
Notes may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, any
designation of an office or agency for payment of Notes shall be subject to
Section 3.04. The Issuer will give prompt written notice to the Indenture
Trustee and the Note Insurer of any such designation or rescission and of any
change in the location of any such other office or agency.
Section 3.03. Money For Note Payments To Be Held In Trust.
All payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Note Payment Account pursuant
to Section 8.02(c) or Section 5.07 shall be made on behalf of the Issuer by
the Paying Agent, and no amounts so withdrawn from the Note Payment Account
for payments of Notes shall be paid over to the Issuer under any circumstances
except as provided in this Section 3.03 or in Section 5.07 or Section 8.02.
With respect to Definitive Notes, if the Issuer shall have a Paying Agent
that is not also the Note Registrar, such Note Registrar shall furnish, no
later than the fifth calendar day after each Record Date, a list, in such form
as such Paying Agent may reasonably require, of the names and addresses of the
Holders of Notes and of the number of Individual Notes held by each such
Holder.
Whenever the Issuer shall have a Paying Agent other than the Indenture
Trustee, it will, on or before the Business Day next preceding each Payment
Date direct the Indenture Trustee to deposit with such Paying Agent an
aggregate sum sufficient to pay the amounts then becoming due (to the extent
funds are then available for such purpose in the Note Payment Account), such
sum to be held in trust for the benefit of the Persons entitled thereto. Any
moneys deposited with a Paying Agent in excess of an amount sufficient to pay
the amounts then becoming due on the Notes with respect to which such deposit
was made shall, upon Issuer Order, be paid over by such Paying Agent to the
Indenture Trustee for application in accordance with Article VIII.
Subject to the prior consent of the Note Insurer, any Paying Agent other
than the Indenture Trustee may be appointed by Issuer Order and at the expense
of the Issuer. The Issuer shall not appoint any Paying Agent (other than the
Indenture Trustee) that is not, at the time of such appointment, a depository
institution or trust company whose obligations would be Permitted Investments
pursuant to clause (c) of the definition of the term Permitted Investments.
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, that such Paying Agent will:
(1) allocate all sums received for payment to the Holders of
Notes on each Payment Date among such Holders in the proportion
specified in the applicable Payment Date Statement, in each case to
the extent permitted by applicable law;
(2) 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;
(3) if such Paying Agent is not the Indenture Trustee,
immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of
the Notes if at any time the Paying Agent ceases to meet the
standards set forth above required to be met by a Paying Agent at
the time of its appointment;
(4) if such Paying Agent is not the Indenture Trustee, give the
Indenture Trustee notice of any Default by the Issuer (or any other
obligor upon the Notes) in the making of any payment required to be
made with respect to any Notes for which it is acting as Paying
Agent;
(5) if such Paying Agent is not the Indenture Trustee, 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; and
(6) comply with all requirements of the Code, and all
regulations thereunder, with respect to 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; provided, however, that with
respect to withholding and reporting requirements applicable to
original issue discount (if any) on any of the Notes, the Issuer has
provided the calculations pertaining thereto to the Indenture
Trustee and the Paying Agent.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or any other purpose, by Issuer Order direct
any Paying Agent, if other than the Indenture Trustee, to pay to the Indenture
Trustee all sums held in trust by such Paying Agent, such sums to be held by
the Indenture Trustee upon the same trusts as those upon which such sums were
held by such Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
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 two and one-half years after such amount has become due and payable to the
Holder of such Note (or if earlier, three months before the date on which such
amount would escheat to a governmental entity under applicable law) shall be
discharged from such trust and paid to the Issuer; 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. The Indenture Trustee may
adopt and employ, at the expense of the Issuer, any 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 moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or any Agent, at the last address of record for each such Holder).
Section 3.04. Existence Of Issuer.
(a) Subject to Sections 3.04(b) and (c), the Issuer will keep in
full effect its existence, rights and franchises as a business trust under the
laws of the State of Delaware or under the laws of any other state or the
United States of America, 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 Master Servicing Agreement and the FSA Insurance Agreement.
(b) Subject to Section 3.09(vii) and the prior written consent of
the Note Insurer, any entity into which the Issuer may be merged or with which
it may be consolidated, or any entity resulting from any merger or
consolidation to which the Issuer shall be a party, shall be the successor
Issuer under this Indenture without the execution or filing of any paper,
instrument or further act to be done on the part of the parties hereto,
anything in any agreement relating to such merger or consolidation, by which
any such Issuer may seek to retain certain powers, rights and privileges
therefore obtaining for any period of time following such merger or
consolidation to the contrary notwithstanding (other than Section 3.09(vii)).
(c) Upon any consolidation or merger of or other succession to the
Issuer in accordance with this Section 3.04, the Person formed by or surviving
such consolidation or merger (if other than the Issuer) may exercise every
right and power of, and shall have all of the obligations of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
Section 3.05. 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 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;
(iv) enforce any of the Mortgage Loans, the Master Servicing
Agreement or the Mortgage Loan Purchase Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, and of the Noteholders, in the Mortgage
Loans and the other property held as part of the Trust Estate against the
claims of all Persons and parties.
(b) 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, or to which it is
intended to be removed, as described in the Opinion of Counsel delivered at
the Closing Date pursuant to Section 2.1l(c), or cause or permit ownership or
the pledge of any portion of the Trust Estate that consists of book-entry
securities to be recorded on the books of a Person located in a different
jurisdiction from the jurisdiction in which such ownership or pledge was
recorded at such time 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.
Section 3.06. [Reserved]
Section 3.07. Performance Of Obligations; Master Servicing Agreement.
(a) The Issuer shall (or cause its Manager to) punctually perform
and observe all of its obligations under this Indenture , the Custodial
Agreement and the Master Servicing Agreement.
(b) The Issuer shall not take any action and will use its Best
Efforts not to permit any action to be taken by its Manager that would release
any Person from any of such Person's covenants or obligations under any of the
Trustee Mortgage Files or under any instrument included in the Trust Estate,
or that would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or effectiveness of, any
of the documents or instruments contained in the Trustee Mortgage Files,
except as expressly permitted in this Indenture, the Master Servicing
Agreement or such document included in the Trustee Mortgage File or other
instrument or unless such action will not adversely affect the interests of
the Holders of the Notes.
(c) If the Issuer shall have knowledge of the occurrence of a
default under the Master Servicing Agreement or a Default hereunder, the
Issuer shall (or cause its Manager to) promptly notify the Indenture Trustee,
the Note Insurer and the Rating Agencies thereof, and shall specify in such
notice the action, if any, the Issuer (or its Manager) is taking with respect
to such default or Default, as the case may be.
(d) Upon any termination of the Master Servicer's rights and powers
pursuant to the Master Servicing Agreement, the Indenture Trustee shall
promptly notify the Rating Agencies. As soon as any successor Master Xxxxxxxx
is appointed, the Indenture Trustee shall notify the Rating Agencies,
specifying in such notice the name and address of such successor Master
Servicer.
Section 3.08. Investment Company Act.
The Issuer shall at all times conduct its operations so as not to be
subject to, or shall comply with, the requirements of the Investment Company
Act of 1940, as amended (or any successor statute), and the rules and
regulations thereunder.
Section 3.09. Negative Covenants.
The Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of any portion of
the Trust Estate except as expressly permitted by this Indenture or the
Master Servicing Agreement;
(ii) claim any credit on, or make any deduction from, the principal
of, or interest on, any of the Notes by reason of the payment of any
taxes levied or assessed upon any portion of the Trust Estate;
(iii) engage in any business or activity other than as permitted by
the Trust Agreement or other than in connection with, or relating to, the
issuance of the Notes pursuant to this Indenture or amend the Trust
Agreement, as in effect on the Closing Date, other than in accordance
with Section 11.01;
(iv) incur, issue, assume or otherwise become liable for a
indebtedness other than the Notes;
(v) incur, assume, guaranty or agree to indemnify any Person with
respect to any indebtedness of any Person, except for such indebtedness
as may be incurred by the Issuer in connection with the issuance of the
Notes pursuant to this Indenture;
(vi) dissolve or liquidate in whole or in part (until the Notes are
paid in full);
(vii) (1) permit the validity or effectiveness of this Indenture or
any Grant to be impaired, or permit the lien of this Indenture to be
impaired, amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or obligations
under this Indenture, except as may be expressly permitted hereby, (2)
permit any lien, charge, 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 (3) permit the lien of
this Indenture not to constitute a valid perfected first priority
security interest in the Trust Estate; or
(viii) take any other action that should reasonably be expected to,
or fail to take any action if such failure should reasonably be expected
to, cause the Issuer to be taxable as (a) an association pursuant to
Section 7701 of the Code or (b) a taxable mortgage pool pursuant to
Section 7701(i) of the Code.
Section 3.10. Annual Statement As To Compliance.
On or before December 31, 1999, and each December 31 thereafter, the
Issuer shall (or cause its Manager to) deliver to the Indenture Trustee, the
Note Insurer and the Underwriters a written statement, signed by an Authorized
Officer of the Owner Trustee, stating that:
(1) a review of the fulfillment by the Issuer during such year
of its obligations under this Indenture has been made under such
Authorized Officer's supervision; and
(2) 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 throughout such year, or, if there
has been a Default in the fulfillment of any such covenant or
condition, specifying each such Default known to such Authorized
Officer and the nature and status thereof.
Section 3.11. 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 or to the Master
Servicer, (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, distributions to the Master Servicer, the
Indenture Trustee, the Custodian, the Owner Trustee, the Note Insurer and the
Certificateholders as contemplated by, and to the extent funds are available
for such purpose under this Indenture, the Master Servicing Agreement or the
Trust Agreement and the Issuer will not, directly or indirectly, make or cause
to be made payments to or distributions from the Note Payment Account except
in accordance with this Indenture.
Section 3.12. Treatment Of Notes As Debt For Tax Purposes.
The Issuer shall treat the Notes as indebtedness for all federal and
state tax purposes.
Section 3.13. Notice Of Events Of Default.
The Issuer shall give the Indenture Trustee, the Note Insurer, the Rating
Agencies and the Underwriters prompt written notice of each Default and Event
of Default hereunder, each default on the part of the Master Servicer of its
obligations under the Master Servicing Agreement and each default on the part
of the Initial Seller of its obligations under the Sale Agreements.
Section 3.14. Further Instruments And Acts.
Upon request of the Indenture Trustee or the Note Insurer, 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.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction And Discharge Of Indenture.
Whenever the following conditions shall have been satisfied:
(1) either
(A) 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
2.07, and (ii) Notes for whose payment money has
theretofore been deposited in trust and thereafter repaid
to the Issuer, as provided in Section 3.03) have been
delivered to the Note Registrar for cancellation; or
(B) all Notes not theretofore delivered to the Note Registrar
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the Final Maturity
Date within one year, or
(iii)are to be called for redemption within one year under
irrevocable arrangements satisfactory to the
Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of clauses (B)(i), (B)(ii) or (B)(iii)
above, has irrevocably deposited or caused to be 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 not theretofore delivered to the Indenture Trustee for
cancellation, for principal and interest to the Final Maturity Date
or to the applicable Redemption Date, as the case may be, and in the
case of Notes that were not paid at the Final Maturity Date of their
entire unpaid principal amount, for all overdue principal and all
interest payable on such Notes to the next succeeding Payment Date
therefor;
(2) the latest of (a) 18 months after payment in full of all
outstanding obligations under the Notes, (b) the date on which the
Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer and the Indenture Trustee (including,
without limitation, amounts due the Note Insurer hereunder); and
(3) the Issuer has delivered to the Indenture Trustee and the
Note Insurer an Officers' Certificate and an Opinion of Counsel
satisfactory in form and substance to the Indenture Trustee and the
Note Insurer each stating that all conditions precedent herein
providing for the satisfaction and discharge of this Indenture have
been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then
acting as such hereunder shall, at the expense of the Issuer (or of the Master
Servicer in the case of a redemption by the Master Servicer), execute and
deliver all such instruments as may be necessary to acknowledge the
satisfaction and discharge of this Indenture and shall pay, or assign or
transfer and deliver, to the Issuer or upon Issuer Order all cash, securities
and other property held by it as part of the Trust Estate remaining after
satisfaction of the conditions set forth in clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee and the Paying Agent to the Issuer and
the Holders of Notes under Section 3.03, the obligations of the Indenture
Trustee to the Holders of Notes under Section 4.02 and the provisions of
Section 2.07 with respect to lost, stolen, destroyed or mutilated Notes,
registration of transfers of Notes and rights to receive payments of principal
of and interest on the Notes shall survive.
Section 4.02. Application Of Trust Money.
All money deposited with the Indenture Trustee pursuant to Sections 3.03
and 4.01 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, as the Indenture Trustee may determine, to the
Persons entitled thereto, of the principal and interest for whose payment such
money has been deposited with the Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event Of Default.
"Event of Default", wherever used herein, means, with respect to Notes
issued hereunder, any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) if the Issuer shall default in the payment on any Payment
Date of any Required Payment Amount or fail to pay the Notes in full
on or before the Final Maturity Date (and in the case of any such
default, such default or failure shall continue for a period of 5
days unremedied);
(2) an Overcollateralization Deficit exists with respect to the
Notes;
(3) if the Issuer shall breach or default in the due observance
of any one or more of the covenants set forth in clauses (i) through
(viii) of Section 3.09;
(4) if the Issuer shall breach, or default in the due
observance or performance of, any other of its covenants in this
Indenture, and such Default shall continue for a period of 30 days
after there shall have been given, by registered or certified mail,
to the Issuer and the Note Insurer by the Indenture Trustee at the
direction of the Note Insurer, or to the Issuer and the Indenture
Trustee by the Holders of Notes representing at least 25% of the
Note Balance of the Outstanding Notes, with the prior written
consent of the Note Insurer, a written notice specifying such
Default and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder;
(5) if any representation or warranty of the Issuer made in
this Indenture or any certificate or other writing, delivered by the
Issuer pursuant hereto or in connection herewith shall prove to be
incorrect in any material respect as of the time when the same shall
have been made and, within 30 days after there shall have been
given, by registered or certified mail, written notice thereof to
the Issuer and the Note Insurer by the Indenture Trustee at the
direction of the Note Insurer, or to the Issuer and the Indenture
Trustee by the Holders of Notes representing at least 25% of the
Note Balance of the Outstanding Notes, with the prior written
consent of the Note Insurer, the circumstance or condition in
respect of which such representation or warranty was incorrect shall
not have been eliminated or otherwise cured; provided, however, that
in the event that there exists a remedy with respect to any such
breach that consists of a purchase obligation, repurchase obligation
or right to substitute under the Basic Documents, then such purchase
obligation, repurchase obligation or right to substitute shall be
the sole remedy with respect to such breach and shall not constitute
an Event of Default hereunder;
(6) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Issuer in an involuntary case under
the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the
Issuer or of any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Issuer and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days;
(7) the commencement by the Issuer of a voluntary case under
the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future federal or state bankruptcy, insolvency or
similar law, or the consent by the Issuer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or
of any substantial part of its property or the making by the Issuer
of an assignment for the benefit of creditors or the failure by the
Issuer generally to pay its debts as such debts become due or the
taking of corporate action by the Issuer in furtherance of any of
the foregoing; or
(8) the occurrence of an Event of Default under the FSA
Insurance Agreement.
Section 5.02. Acceleration Of Maturity; Rescission And Annulment.
If an Event of Default occurs and is continuing, then and in every such
case, but with the consent of the Note Insurer in the absence of a Note
Insurer Default, the Indenture Trustee may, and on request of the Note Insurer
or, with the consent of the Note Insurer, the Holders of Notes representing
not less than 50% of the Note Balance of the Outstanding Notes, shall, declare
all the Notes to be immediately due and payable by a notice in writing to the
Issuer (and to the Indenture Trustee if given by Noteholders), and upon any
such declaration such Notes, in an amount equal to the Note Balance of such
Notes, together with accrued and unpaid interest thereon to the date of such
acceleration, shall become immediately due and payable, all subject to the
prior written consent of the Note Insurer in the absence of a Note Insurer
Default.
At any time after such a declaration of acceleration of maturity of the
Notes 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
provided the Note Insurer or the Holders of Notes representing more than 50%
of the Note Balance of the Outstanding Notes, with the prior written consent
of the Note Insurer, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 5.03. Collection Of Indebtedness And Suits For Enforcement By
Indenture Trustee.
Subject to the provisions of Section 3.01 and the following sentence, if
an Event of Default occurs and is continuing, the Indenture Trustee may, with
the prior written consent of the Note Insurer and shall, if so directed by the
Note Insurer, proceed to protect and enforce its rights and the rights of the
Noteholders and the Note Insurer by any Proceedings the Indenture Trustee
deems appropriate 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 enforce any other proper
remedy. Any Proceedings brought by the Indenture Trustee on behalf of the
Noteholders and the Note Insurer or any Noteholder against the Issuer shall be
limited to the preservation, enforcement and foreclosure of the liens,
assignments, rights and security interests under the Indenture and no
attachment, execution or other unit or process shall be sought, issued or
levied upon any assets, properties or funds of the Issuer, other than the
Trust Estate relative to the Notes in respect of which such Event of Default
has occurred. If there is a foreclosure of any such liens, assignments, rights
and security interests under this Indenture, by private power of sale or
otherwise, no judgment for any deficiency upon the indebtedness represented by
the Notes may be sought or obtained by the Indenture Trustee or any Noteholder
against the Issuer. The Indenture Trustee shall be entitled to recover, as
provided in Section 5.05 and Section 5.07, the costs and expenses expended by
it pursuant to this Article V including reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel.
Section 5.04. Remedies.
If an Event of Default shall have occurred and be continuing and the
Notes have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee, at
the direction of the Note Insurer (subject to Section 5.17, to the extent
applicable) may, for the benefit of the Noteholders and the Note Insurer, do
one or more of the following:
(a) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer moneys
adjudged due, subject in all cases to the provisions of Sections 3.01 and
5.03;
(b) in accordance with Section 5.17, sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or
private Sales called and conducted in any manner permitted by law;
(c) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee or the Holders of the Notes
and the Note Insurer hereunder; and
(e) refrain from selling the Trust Estate and apply all Available
Funds pursuant to Section 5.07.
Section 5.05. Indenture Trustee May File Proofs Of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Notes
or the property of the Issuer or of such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the 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 on the Issuer for
the payment of any overdue principal or interest) shall, with the prior
written consent of the Note Insurer, be entitled and empowered, by
intervention in such Proceeding or otherwise to:
(i) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel) and of the Noteholders and the Note
Insurer allowed in such Proceeding, and
(ii) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such Proceeding is hereby authorized by each
Noteholder and the Note Insurer to make such payments to the Indenture
Trustee and, in the event that the Indenture Trustee shall consent to the
making of such payments directly to the Noteholders and the Note Insurer,
to pay to the Indenture Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any
Holder thereof, or the Note Insurer, or to authorize the Indenture Trustee to
vote in respect of the claim of any Noteholder or the Note Insurer in any such
Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession Of
Notes.
All rights of action and claims under this Indenture or any of the Notes
may be prosecuted and enforced by the Indenture Trustee without the possession
of any of the Notes or the production thereof in any Proceeding relating
thereto, and any such Proceeding instituted by the Indenture Trustee, at the
direction of the Note Insurer, shall be brought in its own name as trustee of
an express trust, and any recovery of judgment shall be for the ratable
benefit of the Holders of the Notes and the Note Insurer in respect of which
such judgment has been recovered after payment of amounts required to be paid
pursuant to clause (i) Section 5.07.
Section 5.07. Application Of Money Collected.
If the Notes have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Indenture Trustee pursuant to this
Article or otherwise and any other monies that may then be held or thereafter
received by the Indenture Trustee as security for the Notes shall be applied
in the following order, at the date or dates fixed by the Indenture Trustee
and, in case of the payment of the entire amount due on account of principal
of, and interest on, the Notes, upon presentation and surrender thereof:
(i) first, to the Indenture Trustee, any unpaid Indenture Trustee
Fees then due and any other amounts payable and due to the Indenture
Trustee under this Indenture, including any costs or expenses incurred by
it in connection with the enforcement of the remedies provided for in
this Article V;
(ii) second, to the Master Servicer, any amounts required to pay the
Master Servicer for any unpaid Master Servicing Fees then due and to
reimburse the Master Servicer for related Monthly Advances previously
made by, and not previously reimbursed or retained by, the Master
Servicer (including Nonrecoverable Advances to the extent not previously
reimbursed) and, upon the final liquidation of the related Mortgage Loan
or the final liquidation of the Trust Estate, Servicing Advances
previously made by, and not previously reimbursed or retained by, the
Master Servicer;
(iii) third, to the payment of the Monthly Interest Amount then due
and unpaid upon the Outstanding Notes through the day preceding the date
on which such payment is made;
(iv) fourth, to the payment of the Note Balance of the Outstanding
Notes, up to the amount of their respective Note Balances, ratably,
without preference or priority of any kind;
(v) fifth, to the Note Insurer any amounts due and owing to the Note
Insurer under the FSA Insurance Agreement; and
(vi) sixth, the remainder to the Certificate Distribution Account
for payment to the Certificateholders.
Section 5.08. Limitation On Suits.
No Holder of a Note shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Indenture Trustee and the Note Insurer of a continuing Event of
Default;
(2) the Holders of Notes representing not less than 25% of the
Note Balance of the Outstanding Notes shall have made written
request to the Indenture Trustee to institute Proceedings in respect
of such Event of Default in its own name as Indenture Trustee
hereunder;
(3) such Holder or Holders have offered to the Indenture
Trustee indemnity in full against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such Proceeding;
(5) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of Notes representing more than 50% of the Note Balance of
the Outstanding Notes; and
(6) the consent of the Note Insurer shall have been obtained;
it being 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 and for the equal and ratable benefit of all the
Holders of Notes.
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 50% of the Note Balances of the Outstanding
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken notwithstanding any other provision herein to the
contrary.
Section 5.09. Unconditional Rights Of Noteholders To Receive Principal
And Interest.
Subject to the provisions in this Indenture (including Sections 3.01 and
5.03) limiting the right to recover amounts due on a Note to recovery from
amounts in the Trust Estate, the Holder of any Note shall have the right, to
the extent permitted by applicable law, which right is absolute and
unconditional, to receive payment of each installment of interest on such Note
on the respective Payment Date for such installments of interest, to receive
payment of each installment of principal of such Note when due (or, in the
case of any Note called for redemption, on the date fixed for such redemption)
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 5.10. Restoration Of Rights And Remedies.
If the Indenture Trustee, the Note Insurer 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, the Note Insurer or to
such Noteholder, then and in every such case the Issuer, the Indenture
Trustee, the Note Insurer and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Indenture Trustee, the Note Insurer and the Noteholders shall continue as
though no such Proceeding had been instituted.
Section 5.11. Rights And Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Indenture
Trustee, the Note Insurer 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 5.12. Delay Or Omission Not Waiver.
No delay or omission of the Indenture Trustee, the Note Insurer or of 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 or by law to the Indenture Trustee, the Note Insurer or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders
with the prior consent of the Note Insurer, as the case may be.
Section 5.13. Control By Noteholders.
The Holders of Notes representing more than 50% of the Note Balance of
the Outstanding Notes on the applicable Record Date shall, with the consent of
the Note Insurer, have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) any direction to the Indenture Trustee to undertake a Sale
of the Trust Estate shall be by the Holders of Notes representing
the percentage of the Note Balance of the Outstanding Notes
specified in Section 5.17(b)(1), unless Section 5.17(b)(2) is
applicable; and
(3) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction; provided, however, that, subject to Section 6.01, the
Indenture Trustee need not take any action that it determines might
involve it in liability or be unjustly prejudicial to the
Noteholders not consenting.
Section 5.14. Waiver Of Past Defaults.
The Holders of Notes representing more than 50% of the Note Balance of
the Outstanding Notes on the applicable Record Date may on behalf of the
Holders of all the Notes, and with the consent of the Note Insurer, waive any
past Default hereunder and its consequences, except a Default:
(1) in the payment of principal or any installment of interest
on any Note; or
(2) in respect of a covenant or provision hereof that under
Section 9.02 cannot be modified or amended without the consent of
the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 5.15. Undertaking For Costs.
All parties to this Indenture agree, and each Holder of any Note by his
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 shall not apply to
any suit instituted by the Indenture Trustee, to any suit instituted by any
Noteholder, or group of Noteholders, holding in the aggregate Notes
representing more than 10% of the Note Balance of the Outstanding Notes, or to
any suit instituted by any Noteholder for the enforcement of the payment of
any Required Payment Amount on any Note on or after the related Payment Date
or for the enforcement of the payment of principal of any Note on or after the
Final Maturity Date (or, in the case of any Note called for redemption, on or
after the applicable Redemption Date).
Section 5.16. 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 of law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
in, or the performance of, this Indenture; and the Issuer (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Indenture Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
Section 5.17. Sale Of Trust Estate.
(a) The power to effect any sale (a "Sale") of any portion of the
Trust Estate pursuant to Section 5.04 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 with respect thereto
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.
(b) To the extent permitted by law, the Indenture Trustee shall not
in any private Sale sell or otherwise dispose of the Trust Estate, or any
portion thereof, unless:
(1) the Holders of Notes representing not less than 50% of the
Note Balance of the Notes then Outstanding consent to or direct the
Indenture Trustee to make such Sale; or
(2) the proceeds of such Sale would be not less than the entire
amount that would be payable to the Holders of the Notes, in full
payment thereof in accordance with Section 5.07, on the Payment Date
next succeeding the date of 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 disposition thereof for
purposes of this Section 5.17(b). In the absence of a Note Insurer Default, no
Sale hereunder shall be effective without the consent of the Note Insurer.
(c) Unless the Holders of all Outstanding Notes have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than
the amount described in paragraph (2) of subsection (b) of this Section 5.17
has not been established by the Indenture Trustee and no Person bids an amount
equal to or greater than such amount, the Indenture Trustee, acting in its
capacity as Indenture Trustee on behalf of the Noteholders, shall prevent such
sale and bid an amount (which shall include the Indenture Trustee's right, in
its capacity as Indenture Trustee, to credit bid) at least $1.00 more than the
highest other bid in order to preserve the Trust Estate on behalf of the
Noteholders.
(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 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 Outstanding Notes or claims for interest
thereon in lieu of cash up to the amount that 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 public Sale thereof, 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 that would be payable to the Holders of the Notes as a result
of such Sale in accordance with Section 5.07 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 moneys.
Section 5.18. Action On Notes.
The Indenture Trustee's right to seek and recover judgment under this
Indenture shall not be affected by the seeking, obtaining or application of
any other relief under or with respect to this Indenture. Neither the lien of
this Indenture nor any rights or remedies of the Indenture Trustee, the Note
Insurer or the Holders of Notes 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.
Section 5.19. No Recourse To Other Trust Estates Or Other Assets Of The
Issuer.
The Trust Estate Granted to the Indenture Trustee as security for the
Notes serves as security only for the Notes. Holders of the Notes shall have
no recourse against the trust estate granted as security for any other series
of Notes issued by the Issuer, and no judgment against the Issuer for any
amount due with respect to the Notes may be enforced against either the trust
estate securing any other series or any other assets of the Issuer, nor may
any prejudgment lien or other attachment be sought against any such other
trust estate or any other assets of the Issuer.
Section 5.20. Application Of The Trust Indenture Act.
Pursuant to Section 316(a) of the TIA, all provisions automatically
provided for in Section 316(a) are hereby expressly excluded.
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 such of 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 his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Indenture Trustee need perform only those duties that
are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(2) In the absence of bad faith on its part, the Indenture
Trustee may request and conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture
Trustee shall, however, examine such certificates and opinions to
determine whether they conform on their face 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:
(1) This paragraph does not limit the effect of subsection (b)
of this Section 6.01;
(2) 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
(3) The Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.13, 5.14 or
5.17 or exercising any trust or power conferred upon the Indenture
Trustee under this Indenture.
(d) Except with respect to duties of the Indenture Trustee
prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for
all purposes under this Indenture, the Indenture Trustee shall not be deemed
to have notice or knowledge of any Default or Event of Default described in
Section 5.01 other than Section 5.01(1) unless a Responsible Officer assigned
to and working in the Indenture Trustee's corporate trust department has
actual knowledge thereof or unless written notice of any event that is in fact
such an Event of Default or Default is received by the Indenture Trustee at
the Corporate Trust Office, and such notice references the Notes generally,
the Issuer, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any 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
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to hereunder, under the Master
Servicing Agreement or otherwise.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Issuer in and to the Trust Estate following an Event of
Default and a consequent declaration of acceleration of the Maturity of the
Notes, whether such extinguishment occurs through a Sale of the Trust Estate
to another Person, the acquisition of the Trust Estate by the Indenture
Trustee or otherwise, the rights, powers and duties of the Indenture Trustee
with respect to the Trust Estate (or the proceeds thereof) and the Noteholders
and the Note Insurer and the rights of Noteholders and the Note Insurer shall
continue to be governed by the terms of this Indenture.
(h) The Indenture Trustee or any Custodian appointed pursuant to
Section 8.13 shall at all times retain possession of the Trustee Mortgage
Files in the State of Minnesota or the State of California, except for those
Trustee Mortgage Files or portions thereof released to the Master Servicer
pursuant to this Indenture or the Master Servicing Agreement.
Section 6.02. Notice Of Default.
Immediately after the occurrence of any Default known to the Indenture
Trustee, the Indenture Trustee shall transmit by mail to the Note Insurer and
the Underwriters notice of each such Default and, within 90 days after the
occurrence of any Default known to the Indenture Trustee, the Indenture
Trustee shall transmit by mail to all Holders of Notes notice of each such
Default, unless such Default shall have been cured or waived; provided,
however, that in no event shall the Indenture Trustee provide notice, or fail
to provide notice, of a Default known to the Indenture Trustee in a manner
contrary to the requirements of the Trust Indenture Act. Concurrently with the
mailing of any such notice to the Holders of the Notes, the Indenture Trustee
shall transmit by mail a copy of such notice to the Rating Agencies.
Section 6.03. Rights Of Indenture Trustee.
(a) Except as otherwise provided in Section 6.01, 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 any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) With the consent of the Note Insurer, which consent shall not be
unreasonably withheld, the Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or
within its rights or powers.
Section 6.04. Not Responsible For Recitals Or Issuance Of Notes.
The recitals contained herein and in the Notes, except the certificates
of authentication on the Notes, shall be taken as the statements of the
Issuer, and the Indenture Trustee and the Authenticating Agent assume no
responsibility for their correctness. The Indenture Trustee makes no
representations with respect to the Trust Estate or as to the validity or
sufficiency of this Indenture or of the Notes. The Indenture Trustee shall not
be accountable for the use or application by the Issuer of the Notes or the
proceeds thereof or any money paid to the Issuer or upon Issuer Order pursuant
to the provisions hereof.
Section 6.05. May Hold Notes.
The Indenture Trustee, any Agent, or any other agent of the Issuer, in
its individual or any other capacity, may become the owner or pledgee of Notes
and, subject to Sections 6.07 and 6.13, may otherwise deal with the Issuer or
any Affiliate of the Issuer with the same rights it would have if it were not
Indenture Trustee, Agent or such other agent.
Section 6.06. Money Held In Trust.
Money held by the Indenture Trustee in trust hereunder need not be
segregated from other funds except to the extent required by this Indenture or
by law. The Indenture Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer and
except to the extent of income or other gain on investments that are
obligations of the Indenture Trustee, in its commercial capacity, and income
or other gain actually received by the Indenture Trustee on investments, which
are obligations of others.
Section 6.07. Eligibility, Disqualification.
Irrespective of whether this Indenture is qualified under the TIA, this
Indenture shall always have a Indenture Trustee who satisfies the requirements
of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee shall always
have a combined capital and surplus as stated in Section 6.08. The Indenture
Trustee shall be subject to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital And Surplus.
The Indenture Trustee shall at all times have a combined capital and
surplus of at least $50,000,000 or shall be a member of a bank holding company
system, the aggregate combined capital and surplus of which is at least
$100,000,000 and shall at all times be rated "BBB" or better by Standard &
Poor's and "Baa2" by Xxxxx'x; provided, however, that the Indenture Trustee's
separate capital and surplus shall at all times be at least the amount
required by TIA Section 310(a)(2). If the Indenture Trustee publishes annual
reports of condition of the type described in TIA Section 310(a)(1), its
combined capital and surplus for purposes of this Section 6.08 shall be as set
forth in the latest such report. If at any time the Indenture Trustee shall
cease to be eligible in accordance with the provisions of this Section 6.08
and TIA Section 310(a)(2), it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 6.09. Resignation And Removal; Appointment Of Successor.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Indenture Trustee under Section 6.10.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Issuer, the Master Servicer, the Note Insurer and each
Rating Agency. If an instrument of acceptance by a successor Indenture Trustee
shall not have been delivered to the Indenture Trustee within 30 days after
the giving of such notice of resignation, the resigning Indenture Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by the Note
Insurer or, with the consent of the Note Insurer, by Act of the Holders
representing more than 50% of the Note Balance of the Outstanding Notes, by
written notice delivered to the Indenture Trustee and to the Issuer.
(d) If at any time:
(1) the Indenture Trustee shall have a conflicting interest
prohibited by Section 6.07 and shall fail to resign or eliminate
such conflicting interest in accordance with Section 6.07 after
written request therefor by the Issuer or by any Noteholder; or
(2) the Indenture Trustee shall cease to be eligible under
Section 6.08 or shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Indenture
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation
or liquidation;
then, in any such case, (i) the Issuer by an Issuer Order, with the consent of
the Note Insurer, may, and if so directed by the Note Insurer, shall remove
the Indenture Trustee, and the Issuer shall join with the Indenture Trustee in
the execution, delivery and performance of all instruments and agreements
necessary or proper to appoint a successor Indenture Trustee acceptable to the
Note Insurer and to vest in such successor Indenture Trustee any property,
title, right or power deemed necessary or desirable, subject to the other
provisions of this Indenture; provided, however, if the Issuer and the Note
Insurer do not join in such appointment within fifteen (15) days after the
receipt by it of a request to do so, or in case an Event of Default has
occurred and is continuing, the Indenture Trustee may petition a court of
competent jurisdiction to make such appointment, or (ii) subject to Section
5.15, and, in the case of a conflicting interest as described in clause (1)
above, unless the Indenture Trustee's duty to resign has been stayed as
provided in TIA Section 310(b), the Note Insurer or any Noteholder who has
been a bona fide Holder of a Note for at least six months may, on behalf of
himself and all others similarly situated, with the consent of the Note
Insurer, petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the
Indenture Trustee for any cause, the Note Insurer (and if the Note Insurer
fails to do so within 60 days, the Issuer shall be obligated to) appoint a
successor Indenture Trustee acceptable to the Note Insurer. If within one year
after such resignation, removal or incapability or the occurrence of such
vacancy a successor Indenture Trustee shall be appointed by the Note Insurer
or, with the consent of the Note Insurer, by Act of the Holders of Notes
representing more than 50% of the Note Balance of the Outstanding Notes
delivered to the Issuer and the retiring Indenture Trustee, the successor
Indenture Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Indenture Trustee and supersede the
successor Indenture Trustee appointed by the Issuer. If no successor Indenture
Trustee shall have been so appointed by the Issuer, the Note Insurer or
Noteholders and shall have accepted appointment in the manner hereinafter
provided, any Noteholder who has been a bona fide Holder of a Note for at
least six months may, on behalf of himself and all others similarly situated,
with the consent of the Note Insurer, petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(f) The Issuer shall give notice of each resignation and each
removal of the Indenture Trustee and each appointment of a successor Indenture
Trustee to the Holders of Notes and the Note Insurer. Each notice shall
include the name of the successor Indenture Trustee and the address of its
Corporate Trust Office.
Section 6.10. Acceptance Of Appointment By Successor.
Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer, the Note Insurer and the retiring
Indenture Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective and such successor Indenture Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Indenture Trustee. Notwithstanding the foregoing, on
request of the Issuer or the successor Indenture Trustee, such retiring
Indenture Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Indenture Trustee all the rights,
powers and trusts of the retiring Indenture Trustee, and shall duly assign,
transfer and deliver to such successor Indenture Trustee all property and
money held by such retiring Indenture Trustee hereunder. Upon request of any
such successor Indenture Trustee, the Issuer shall execute and deliver any and
all instruments for more fully and certainly vesting in and confirming to such
successor Indenture Trustee all such rights, powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at the
time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article.
Section 6.11. Merger, Conversion, Consolidation Or Succession To Business
Of Indenture Trustee.
Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Indenture Trustee, shall be the successor
of the Indenture Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto. In case any Notes have been authenticated, but not delivered, by the
Indenture Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Indenture Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as
if such successor Indenture Trustee had authenticated such Notes.
Section 6.12. Preferential Collection Of Claims Against Issuer.
The Indenture Trustee (and any co-trustee or separate trustee) shall be
subject to TIA Section 311(a), excluding any creditor relationship listed in
TIA Section 31l(b), and an Indenture Trustee (and any co-trustee or separate
trustee) who has resigned or been removed shall be subject to TIA Section
311(a) to the extent indicated.
Section 6.13. Co-Indenture Trustees And Separate Indenture Trustees.
At any time or times, for the purpose of meeting the legal requirements
of the TIA or of any jurisdiction in which any of the Trust Estate may at the
time be located, the Indenture Trustee shall have power to appoint, and, upon
the written request of the Indenture Trustee, of the Note Insurer or of the
Holders of Notes representing more than 50% of the Note Balance of the
Outstanding Notes with respect to which a co-trustee or separate trustee is
being appointed with the consent of the Note Insurer, the Issuer shall for
such purpose join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Indenture Trustee either to act as
co-trustee, jointly with the Indenture Trustee, of all or any part of the
Trust Estate, or to act as separate trustee of any such property, in either
case with such powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons in the capacity aforesaid, any property,
title, right or power deemed necessary or desirable, subject to the other
provisions of this Section. If the Issuer does not join in such appointment
within 15 days after the receipt by it of a request to do so, or in case an
Event of Default has occurred and is continuing, the Indenture Trustee alone
shall have power to make such appointment. All fees and expenses of any
co-trustee or separate trustee shall be payable by the Issuer or, if an Event
of Default exists, from the Trust Estate with the same priority as the
expenses of the Indenture Trustee.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and
all such instruments shall, on request, be executed, acknowledged and
delivered by the Issuer. Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed subject to the
following terms:
(1) The Notes shall be authenticated and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Indenture Trustee hereunder, shall be
exercised, solely by the Indenture Trustee.
(2) The rights, powers, duties and obligations hereby conferred or
imposed upon the Indenture Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee or by the Indenture Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(3) The Indenture Trustee at any time, by an instrument in writing,
executed by it, with the concurrence of the Issuer evidenced by an Issuer
Order, may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case an Event of Default
has occurred and is continuing, the Indenture Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Issuer, and upon the written
request of the Indenture Trustee, the Issuer shall join with the
Indenture Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section.
(4) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Indenture Trustee, or any
other such trustee hereunder.
(5) Any Act of Noteholders delivered to the Indenture Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 6.14. Authenticating Agents.
The Issuer shall appoint an Authenticating Agent with power to act on its
behalf and subject to its direction in the authentication and delivery of the
Notes designated for such authentication by the Issuer and containing
provisions therein for such authentication (or with respect to which the
Issuer has made other arrangements, satisfactory to the Indenture Trustee and
such Authenticating Agent, for notation on the Notes of the authority of an
Authenticating Agent appointed after the initial authentication and delivery
of such Notes) in connection with transfers and exchanges under Section 2.06,
as fully to all intents and purposes as though the Authenticating Agent had
been expressly authorized by that Section to authenticate and deliver Notes.
For all purposes of this Indenture (other than in connection with the
authentication and delivery of Notes pursuant to Sections 2.05 and 2.11 in
connection with their initial issuance), the authentication and delivery of
Notes by the Authenticating Agent pursuant to this Section shall be deemed to
be the authentication and delivery of Notes "by the Indenture Trustee." Such
Authenticating Agent shall at all times be a Person that both meets the
requirements of Section 6.07 for the Indenture Trustee hereunder and has an
office for presentation of Notes in the United States of America. The
Indenture Trustee shall initially be the Authenticating Agent and shall be the
Note Registrar as provided in Section 2.06. The office from which the
Indenture Trustee shall perform its duties as Note Registrar and
Authenticating Agent shall be the Corporate Trust Office. Any Authenticating
Agent appointed pursuant to the terms of this Section 6.14 or pursuant to the
terms of any supplemental indenture shall deliver to the Indenture Trustee as
a condition precedent to the effectiveness of such appointment an instrument
accepting the trusts, duties and responsibilities of Authenticating Agent and
of Note Registrar or co-Note Registrar and indemnifying the Indenture Trustee
for and holding the Indenture Trustee harmless against, any loss, liability or
expense (including reasonable attorneys' fees) incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance,
administration of the trust or exercise of authority by such Authenticating
Agent, Note Registrar or co-Note Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust
business of any Authenticating Agent, shall be the successor of the
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section, without the execution or filing of any further
act on the part of the parties hereto or the Authenticating Agent or such
successor corporation.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Issuer. The Issuer may at any time terminate the agency
of any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Issuer
shall promptly appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Indenture Trustee, and shall mail notice of
such appointment to all Holders of Notes.
The Indenture Trustee agrees, subject to Section 6.01(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its
services and the Indenture Trustee shall be entitled to be reimbursed for such
payments pursuant to Section 8.02(c). The provisions of Sections 2.09, 6.04
and 6.05 shall be applicable to any Authenticating Agent.
Section 6.15. [Reserved].
Section 6.16. Indenture Trustee Fees And Expenses.
(a) The Indenture Trustee shall be entitled to receive the Indenture
Trustee Fee on each Payment Date as provided herein.
(b) The Indenture Trustee also shall be entitled to (i) payment of
or reimbursement by the Issuer for expenses, disbursements and advances
incurred or made by the Indenture Trustee in accordance with any of the
provisions of this Agreement, the Master Servicing Agreement, the Trust
Agreement and the Custodial Agreement (including, but not limited to, the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) and (ii) indemnification by the
Issuer against losses, liability and expenses, including reasonable attorney's
fees, incurred, arising out of or in connection with this Agreement, the
Master Servicing Agreement, the Notes, the Trust Agreement and the Custodial
Agreement.
(c) The Issuer's obligations to the Indenture Trustee pursuant to
this Section 6.16 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of a Default specified
in clauses (6) or (7) of Section 5.01 hereof, the expenses are intended to
constitute expenses of administration under Title 11 of the Bankruptcy Code or
any other applicable federal or state bankruptcy, insolvency or similar law.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names And Addresses Of
Noteholders.
(a) The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (i) semiannually, not less than 45 days nor more than 60
days after the Payment Date occurring closest to six months after the Closing
Date and each Payment Date occurring at six-month intervals thereafter, all
information in the possession or control of the Issuer, in such form as the
Indenture Trustee may reasonably require, as to names and addresses of the
Holders of Notes, and (ii) at such other times, as the Indenture Trustee may
request in writing, within 30 days after receipt by the Issuer of any such
request, a list 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.
(b) in addition to furnishing to the Indenture Trustee the
Noteholder lists, if any, required under subsection (a), the Issuer shall also
furnish all Noteholder lists, if any, required under Section 3.03 at the times
required by Section 3.03.
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, if any, furnished to the Indenture Trustee
as provided in Section 7.01 and the names and addresses of the 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 Section
7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) or
this Indenture with other Noteholders with respect to their rights under this
Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
Section 7.03. Reports by Indenture Trustee.
(a) Within 60 days after December 31 of each year (the "reporting
date"), commencing with the year after the issuance of the Notes, (i) the
Indenture Trustee shall, if required by TIA Section 313(a), mail to all
Holders a brief report dated as of such reporting date that complies with TIA
Section 313(a); (ii) the Indenture Trustee shall, to the extent not set forth
in the Payment Date Statement pursuant to Section 2.08(d), also mail to
Holders of Notes and the Note Insurer with respect to which it has made
advances, any reports with respect to such advances that are required by TIA
Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders of
Notes and the Note Insurer any reports required by TIA Section 313(b)(1). For
purposes of the information required to be included in any such reports
pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2),
the principal amount of indenture securities outstanding on the date as of
which such information is provided shall be the Note Balance of the then
Outstanding Notes covered by the report.
(b) A copy of each report required under this Section 7.03 shall, at
the time of such transmission to Holders of Notes and the Note Insurer be
filed by the Indenture Trustee with the Commission and with each securities
exchange upon which the Notes are listed. The Issuer will notify the Indenture
Trustee when the Notes are listed on any securities exchange.
Section 7.04. Reports By Issuer.
The Issuer (a) shall deliver to the Indenture Trustee within 15 days
after the Issuer is required to file the same with the Commission copies of
the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may by rules
and regulations prescribe) that the Issuer is required to file with the
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, and (b) shall also comply with the other provisions of TIA
Section 314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Collection Of Moneys.
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 hold all such money
and property received by it as part of the Trust Estate and shall apply it as
provided in this Indenture.
If the Indenture Trustee shall not have received the Remittance Amount by
close of business on any related Remittance Date, the Indenture Trustee shall,
unless the Issuer or the Master Servicer shall have made provisions
satisfactory to the Indenture Trustee for delivery to the Indenture Trustee of
an amount equal to such Remittance Amount, deliver a notice, with a copy to
the Note Insurer, to the Issuer and the Master Servicer of their failure to
remit such Remittance Amount and thereafter the Indenture Trustee shall act in
accordance with instructions of the Note Insurer.
Section 8.02. Note Payment Account; Supplemental Interest Payment
Account.
(a) The Issuer hereby directs the Indenture Trustee to establish for
the Notes, at the Corporate Trust Office, one or more separate trust accounts
that shall collectively be the "Note Payment Account" on or before the Closing
Date. The Indenture Trustee shall promptly deposit in the Note Payment Account
(i) any Remittance Amount received by it from the Master Servicer pursuant to
the Master Servicing Agreement, (ii) any other funds from any deposits to be
made by the Master Servicer pursuant to the Master Servicing Agreement, (iii)
any amount required to be deposited in the Note Payment Account pursuant to
Section 8.01, (iv) all amounts received pursuant to Section 8.03 (other than
any funds in the Policy Payments Account that are not required to be used to
make Scheduled Payments) (v) any amount required to be deposited pursuant to
Section 8.02(b) and (vi) all other amounts received for deposit in the Note
Payment Account, including the payment of any Purchase Price for a Mortgage
Loan received by the Indenture Trustee. All amounts that are deposited from
time to time in the Note Payment Account are subject to withdrawal by the
Indenture Trustee for the purposes set forth in subsections (c) and (d) of
this Section 8.02. All funds withdrawn from the Note Payment Account pursuant
to subsection (d) of this Section 8.02 for the purpose of making payments to
the Holders of Notes shall be applied in accordance with Section 3.03.
(b) The Cap Agreement provides for payments of Supplemental Interest
Payments payable to the Note Insurer to be paid to the Indenture Trustee. The
Indenture Trustee shall receive such payments as agent for the Note Insurer
and shall deposit them in a separate trust account entitled "Supplemental
Interest Payment Account for the Note Insurer and the Noteholders of the
American Residential Eagle Bond Trust 1999-1." Such amount shall be treated
for all purposes, including for the purposes of Section 8.04, as payments of
the Note Insurer pursuant to the FSA Policy. The Indenture Trustee shall, with
respect to each Payment Date on which a Supplemental Interest Payment is to be
made on the Notes, provide the Note Insurer by 12:00 noon, New York City time,
on the third Business Day prior to such Payment Date, a notice in the form set
forth as Exhibit A to the Endorsement to the FSA Policy setting forth the
amount of the Supplemental Interest Payment and the amount received or to be
received in respect of such payment under the Cap Agreement. If any
Supplemental Interest Payment is not paid at or before 1:00 p.m. New York City
time on the date such payment is due under the Cap Agreement, the Indenture
Trustee shall give notice of such non-payment to the Note Insurer and Bear
Xxxxxxx Financial Products, Inc. prior to 5:00 p.m. New York City time on such
date.
Funds in the Supplemental Interest Payment Account will remain
uninvested. Any funds remaining in the Supplemental Interest Payment Account,
after application thereof as provided in Section 8.02(d), shall be paid by the
Indenture Trustee as instructed by the Note Insurer.
(c) So long as no Default or Event of Default shall have occurred
and be continuing, amounts held in the Note Payment Account may be invested in
Permitted Investments, which Permitted Investments shall mature no later than
the Business Day preceding the immediately following Payment Date.
All income or other gains, if any, from investment of moneys deposited in
the Note Payment Account shall be for the benefit of the Indenture Trustee and
on each Payment Date, any such amounts may be released from the Note Payment
Account and paid to the Indenture Trustee as part of its compensation for
acting as Indenture Trustee. Any loss resulting from such investment of moneys
deposited in the Note Payment Account shall be reimbursed immediately as
incurred to the Note Payment Account by the Indenture Trustee. Subject to
Section 6.01 and the preceding sentence, the Indenture Trustee shall not in
any way be held liable by reason of any insufficiency in the Note Payment
Account.
(d) On each Payment Date, the Indenture Trustee shall withdraw
amounts on deposit in the Note Payment Account and pay on a pari passu basis
(i) to the Note Insurer, the Note Insurance Premium; (ii) to the Manager, the
Management Fee; (iii) to the Indenture Trustee, the Indenture Trustee Fee;
(iv) any gains or income from investments on the Note Payment Account to
itself; (v) to the Indenture Trustee, any amounts owed to the Indenture
Trustee pursuant to Section 6.16(b) hereof, but not to exceed $200,000 per
annum; (vi) to the Indenture Trustee, any amounts owed to the Indenture
Trustee pursuant to Section 7(b) of the Master Servicing Agreement not to
exceed $50,000 in the aggregate for such Payment Date and all preceding
Payment Dates; and (vii) provided notice is given to the Indenture Trustee no
later than the 4th Business Day prior to the Payment Date and to the extent
such amounts have not been withdrawn pursuant to the Master Servicing
Agreement, amounts required to pay the Master Servicer any unpaid Master
Servicing Fees then due and to reimburse the Master Servicer for Monthly
Advances and Xxxxxxxxx Advances previously made by, and not previously
reimbursed to or retained by, the Master Servicer, which are so reimbursable
to the Master Servicer pursuant to the Master Servicing Agreement (as reported
in writing by the Master Servicer to the Indenture Trustee). After payment of
such amounts, unless the Notes have been declared due and payable pursuant to
Section 5.02 and moneys collected by the Indenture Trustee are being applied
in accordance with Section 5.07, Available Funds on deposit in the Note
Payment Account on any Payment Date or Redemption Date shall be withdrawn from
the Note Payment Account, together with the amount of Supplemental Interest
Payments on deposit in the Supplemental Interest Payment Account or paid by
the Note Insurer in the amounts required, for application on such Payment Date
as follows:
first, to the Noteholders, an amount equal to (a) the Monthly
Interest Amount for such Payment Date, (b) the amount of the Supplemental
Interest Payment, if any, up to the amount of the Basis Risk Shortfall
with respect to such Payment Date and (c) any unpaid interest due
pursuant to this clause first with respect to previous Payment Dates;
second, to the Noteholders, the Monthly Principal Amount for such
Payment Date in reduction of the Note Balance until the Note Balance is
reduced to zero;
third, to the Note Insurer, any amount due to the Note Insurer
pursuant to the FSA Insurance Agreement (together with interest thereon
at the rate specified in the FSA Insurance Agreement);
fourth, to the Noteholders, in reduction of the Note Balance, the
amount, if any, equal to the lesser of (A) Excess Cash with respect to
such Payment Date, and (B) the lesser of (1) the amount necessary for the
Overcollateralization Amount to equal the Required Overcollateralization
Amount on such Payment Date (after giving effect to application of the
Monthly Principal Amount for such Payment Date) and (2) the amount
necessary to reduce the Note Balance to zero (the "Excess Cash Payment");
fifth, to the Noteholders, the amount of any XXXXX Xxxxxxxxx Amount;
and
sixth, to the Master Servicer, any amounts owed to the Master
Servicer pursuant to Section 6(e) of the Master Servicing Agreement; and
to the Indenture Trustee any amounts owed to it (a) pursuant to Section
7(b) of the Master Servicing Agreement and (b) pursuant to Section
6.16(b) hereof, but only to the extent such amounts are not paid pursuant
to Section 8.02(d)(v) and (vi) hereof, pari passu; and
seventh, to the Certificate Distribution Account for distribution to
the Investor Certificateholder.
Section 8.03. Claims Against The FSA Policy.
(a) If, on the third Business Day prior to the related Payment
Date there is not on deposit with the Indenture Trustee moneys in the
Note Payment Account sufficient to pay Scheduled Payments on the Notes
due on such Payment Date, the Indenture Trustee is authorized by the
Noteholders to, and shall give, notice to the Note Insurer by telephone
or telecopy of the amount of such deficiency by 12:00 noon, New York City
time, on such Business Day, and the allocation of such deficiency between
the amount required to pay interest on the Notes and the amount required
to pay principal of the Notes, confirmed in a Notice of Claim (in the
form set forth as Exhibit A to the Endorsement of the FSA Policy) to the
Note Insurer, by 12:00 noon, New York City time, on such third Business
Day.
(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 FSA Policy in the Policy Payments Account and
distribute such amount only for purposes of making the Scheduled 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 8.02(d).
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 Scheduled
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 Payment Date Statement 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 FSA Policy shall be applied by the Indenture Trustee,
subject to Section 6.06 hereof, together with the funds, if any, to be
withdrawn from the Note Payment Account and Supplemental Interest Payment
Account directly to the payment in full of the Scheduled 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 FSA Policy 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 Note Insurer
except for funds held for the payment of Notes pursuant to Section 3.03
hereof.
(d) The Indenture Trustee shall keep a complete and accurate
record of all funds deposited by the Note Insurer 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 Note Insurer 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 Note Insurer,
the Indenture Trustee shall assign to the Note Insurer all rights to the
payment of interest or principal on the Notes which are then due for
payment to the extent of all payments made by the Note Insurer and the
Note Insurer may exercise any option, vote, right, power or the like with
respect to the Notes to the extent it has made a Scheduled Payment in
respect of principal pursuant to the FSA Policy. The Indenture Trustee
agrees that the Note Insurer 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
Scheduled Payments made under the FSA Policy by the Note Insurer.
(f) Unless a Note Insurer Default exists and is continuing, the
Indenture Trustee shall cooperate in all respects with any reasonable request
by the Note Insurer for action to preserve or enforce the Note Insurer's
rights or interests hereunder without limiting the rights or affecting the
interests of the Noteholders as otherwise set forth herein.
(g) The Indenture Trustee shall surrender the FSA Policy to the Note
Insurer for cancellation upon the expiration of the term of the FSA Policy as
provided in the FSA Insurance Agreement.
Section 8.04. General Provisions Regarding The Note Payment Account, the
Supplemental Interest Payment Account And Mortgage Loans.
(a) The Note Payment Account and the Supplemental Interest Payment
Account shall relate solely to the Notes and to the Mortgage Loans, Permitted
Investments and other property securing the Notes. Funds and other property in
the Note Payment Account and the Supplemental Interest Payment Account shall
not be commingled with any other moneys or property of the Issuer or any
Affiliate thereof. Notwithstanding the foregoing, the Indenture Trustee may
hold any funds or other property received or held by it as part of the Note
Payment Account and the Supplemental Interest Payment Account in collective
accounts maintained by it in the normal course of its business and containing
funds or property held by it for other Persons (which may include the Issuer
or an Affiliate), provided that such accounts are under the sole control of
the Indenture Trustee and the Indenture Trustee maintains adequate records
indicating the ownership of all such funds or property and the portions
thereof held for credit to the Note Payment Account and the Supplemental
Interest Payment Account.
(b) If any amounts are needed for payment from the Note Payment
Account and sufficient uninvested funds are not available therein to make such
payment, the Indenture Trustee shall cause to be sold or otherwise converted
to cash a sufficient amount of the investments in such Note Payment Account.
(c) The Indenture Trustee shall, at all times while any Notes are
Outstanding, maintain in its possession, or in the possession of an agent
whose actions with respect to such items are under the sole control of the
Indenture Trustee, all certificates or other instruments, if any, evidencing
any investment of funds in the Note Payment Account. The Indenture Trustee
shall relinquish possession of such items, or direct its agent to do so, only
for purposes of collecting the final payment receivable on such investment or
certificate or, in connection with the sale of any investment held in the Note
Payment Account, against delivery of the amount receivable in connection with
any sale.
(d) The Indenture Trustee shall not invest any part of the Trust
Estate in Permitted Investments that constitute uncertificated securities (as
defined in Section 8-102 of the Uniform Commercial Code, as enacted in the
relevant jurisdiction) or in any other book-entry securities unless it has
received an Opinion of Counsel reasonably satisfactory in form and substance
to the Indenture Trustee setting forth, with respect to each type of security
for which authority to invest is being sought, the procedures that must be
followed to maintain the lien and security interest created by this Indenture
with respect to the Trust Estate.
Section 8.05. Releases Of Defective Mortgage Loans.
Upon notice or discovery of any breach of a representation or warranty of
the Seller set forth in Exhibit B to the Master Servicing Agreement, which
breach materially and adversely effects the value of the related Mortgage Loan
or the interests of the Indenture Trustee, the Noteholders or the Note Insurer
in such Mortgage Loan, the Indenture Trustee shall require the Initial Seller
to either (i) eliminate or otherwise cure the circumstance or condition in
respect of which such representation or warranty was incorrect as of the time
made, (ii) withdraw such Deleted Mortgage Loan from the lien of this Indenture
by depositing to the Collection Account an amount equal to the Purchase Price
for such Mortgage Loan or (iii) substitute a Replacement Mortgage Loan for
such Deleted Mortgage Loan and deposit any Substitution Amount required to be
paid in connection with such substitution pursuant to Section 2(c)of the
Master Servicing Agreement, all as provided in Section 2(c) of the Master
Servicing Agreement. In the event that the Indenture Trustee has actual
knowledge of the existence of a Defective Mortgage Loan, the Indenture Trustee
shall require the Initial Seller to either (i) cure the defect, (ii) withdraw
the Defective Mortgage Loan from the lien of this Indenture as provided in
clause (ii) of the preceding sentence or (iii) substitute a Replacement
Mortgage Loan as provided in clause (iii) of the preceding sentence, all as
provided in Sections 2(a) of the Master Servicing Agreement. Upon any purchase
of or substitution for a Defective Mortgage Loan or a Deleted Mortgage Loan by
the Initial Seller, or upon purchase of a defaulted Mortgage Loan pursuant to
Section 3(x) of the Master Servicing Agreement (and deposit of the Purchase
Price for such defaulted Mortgage Loan in the Collection Account), the
Indenture Trustee shall cause the Custodian to deliver the Trustee Mortgage
File relating to such Mortgage Loan to the Initial Seller or the purchaser of
such defaulted Mortgage Loan, as the case may be, and the Issuer and the
Indenture Trustee shall execute such instruments of transfer as are necessary
to convey title to such Mortgage Loan to the Initial Seller or such purchaser
free from the lien of this Indenture.
Section 8.06. Reports By Indenture Trustee To Noteholders; Access To
Certain Information.
On each Payment Date, the Indenture Trustee shall make available the
written report required by Section 2.08(d) to Noteholders of record as of the
related Record Date (including the Clearing Agency, if any) and to any other
interested party, via the Trustee's website, electronic bulletin board and its
fax-on-demand service. The Trustee's website will be located at
xxx.xxxxxxx.xxx. The Trustee's electronic bulletin board may be accessed by
calling (0000 000-0000, and its fax-on-demand service may be accessed by
calling (000) 000-0000.
The Indenture Trustee shall make available at its Corporate Trust Office
upon receipt of reasonable advance written notice, during normal business
hours, for review by any Noteholder or any person identified to the Indenture
Trustee as a prospective Noteholder, originals or copies of the following
items: (a) the Indenture and any amendments thereto, (b) all Payment Date
Statements delivered to the Issuer since the Closing Date, (c) any Officers'
Certificates delivered to the Indenture Trustee since the Closing Date as
described in the Indenture and (d) any Accountants' reports delivered to the
Indenture Trustee since the Closing Date as required under the Master
Servicing Agreement. Copies of any and all of the foregoing items will be
available from the Indenture Trustee upon request; however, the Indenture
Trustee will be permitted to require payment of a sum sufficient to cover the
reasonable costs and expenses of providing such copies and shall not be
required to provide such copies without reasonable assurances that such sum
will be paid.
Section 8.07. Trust Estate Mortgage Files.
(a) The Custodian is permitted to release Trustee Mortgage Files or
portions thereof to the Master Servicer on the terms specified in the Master
Servicing Agreement.
(b) The Custodian is permitted to release, at such time as there are
no Notes outstanding, release all of the Trust Estate to the Issuer (other
than any cash held for the payment of the Notes pursuant to Section 3.03 or
4.02).
Section 8.08. Amendment To Master Servicing Agreement.
The Indenture Trustee may, without the consent of any Holder but with the
consent of the Note Insurer, enter into or consent to any amendment or
supplement to the Master Servicing Agreement for the purpose of increasing the
obligations or duties of any party other than the Indenture Trustee or the
Holders of the Notes. The Indenture Trustee may, in its discretion, decline to
enter into or consent to any such supplement or amendment: (i) unless the
Indenture Trustee receives an Opinion of Counsel that the position of the
Holders would not be materially adversely affected or written confirmation
from the Rating Agencies that the then-current implied ratings on the Notes
(without taking into account the FSA Policy) would not be adversely affected
by such supplement or amendment or (ii) if its own rights, duties or
immunities would be adversely affected.
Section 8.09. Delivery Of The Trustee Mortgage Files Pursuant To Master
Servicing Agreement.
As is appropriate for the servicing or foreclosure of any Mortgage Loan,
the Custodian is authorized to deliver to the Master Servicer the Trustee
Mortgage Files for such Mortgage Loan upon receipt by the Indenture Trustee
and the Custodian on or prior to the date such release is to be made of:
(a) such Officers' Certificates, if any, as are required by the
Master Servicing Agreement; and
(b) a "Request for Release" in the form prescribed by the Master
Servicing Agreement, executed by the Master Servicer, providing that the
Master Servicer will hold or retain the Trustee Mortgage Files in trust for
the benefit of the Indenture Trustee, the Note Insurer and the Holders of
Notes.
Section 8.10. [Reserved]
Section 8.11. Termination Of Master Servicer.
In the event of a Master Servicer Event of Default specified in Section 7
of the Master Servicing Agreement, the Indenture Trustee may, with the consent
of the Note Insurer, and shall, upon the direction of the Note Insurer (or as
otherwise provided in the Master Servicing Agreement), terminate the Master
Servicer as provided in Section 7 of the Master Servicing Agreement. If the
Indenture Trustee terminates the Master Servicer, the Indenture Trustee shall,
pursuant to Section 7 of the Master Servicing Agreement, assume the duties of
the Master Servicer or appoint a successor servicer acceptable to the Note
Insurer and meeting the requirements set forth in the Master Servicing
Agreement.
Section 8.12. Opinion Of Counsel.
The Indenture Trustee shall be entitled to receive at least five Business
Days' notice of any action to be taken pursuant to Sections 8.07(a) (other
than in connection with releases of Mortgage Loans that were the subject of a
prepayment in full) and 8.08, accompanied by copies of any instruments
involved, and the Indenture Trustee shall be entitled to receive an Opinion of
Counsel, in form and substance reasonably satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
Section 8.13. Appointment Of Custodians.
The Indenture Trustee may, at the written direction of the Issuer and at
no additional cost to the Issuer or to the Indenture Trustee, with the consent
of the Note Insurer, appoint one or more Custodians to hold all or a portion
of the Trustee Mortgage Files as agent for the Indenture Trustee. Each
Custodian shall (i) be a financial institution supervised and regulated by the
Comptroller of the Currency, the Board of Governors of the Federal Reserve
System, the Office of Thrift Supervision, or the Federal Deposit Insurance
Corporation; (ii) have combined capital and surplus of at least $10,000,000;
(iii) be equipped with secure, fire resistant storage facilities, and have
adequate controls on access to assure the safety and security of the Trustee
Mortgage Files; (iv) utilize in its custodial function employees who are
knowledgeable in the handling of mortgage documents and of the functions of a
mortgage document custodian; and (v) satisfy any other reasonable requirements
that the Issuer may from time to time deem necessary to protect the interests
of Noteholders and the Note Insurer in the Trustee Mortgage Files. Each
Custodian shall be subject to the same obligations and standard of care as
would be imposed on the Indenture Trustee hereunder assuming the Indenture
Trustee retained the Trustee Mortgage Files directly. The appointment of one
or more Custodians shall not relieve the Indenture Trustee from any of its
obligations hereunder. Bankers Trust Company of California, N.A., has been
appointed as the initial Custodian under the Custodial Agreement.
Section 8.14. Rights Of The Note Insurer To Exercise Rights Of
Noteholders.
By accepting its Notes, each Noteholder agrees that unless a Note Insurer
Default exists, the Note Insurer shall have the right to exercise all rights
of the Noteholders under this Agreement and the Master Servicing Agreement
without any further consent of the Noteholders, including, without limitation:
(i) the right to require the Master Servicer to effect foreclosures
upon Mortgage Loans;
(ii) the right to require the Initial Seller to either repurchase or
substitute for Defective Mortgage Loans or Deleted Mortgage Loans
pursuant to Section 8.05;
(iii) the right to direct the actions of the Indenture Trustee
during the continuance of an Event of Default; and
(iv) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer Default
exists, the rights specifically set forth above may be exercised by the
Noteholders only with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 and notwithstanding any
provision in this Indenture to the contrary, so long as a Note Insurer Default
has occurred and is continuing, the Note Insurer shall have no rights to
exercise any voting rights of the Noteholders hereunder, nor shall the
Indenture Trustee be required to obtain the consent of, or act at the
direction of, the Note Insurer.
Section 8.15. Trust Estate And Accounts Held For Benefit Of The Note
Insurer.
The Indenture Trustee shall hold the Trust Estate and shall cause the
Custodian to hold the Trustee Mortgage Files for the benefit of the
Noteholders and the Note Insurer and all references in this Agreement and in
the Notes to the benefit of Holders of the Notes shall be deemed to include
the Note Insurer.
All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto or to the Noteholders
shall also be sent to the Note Insurer.
Section 8.16. 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 Note Insurer, shall comply with the provisions of the FSA
Policy to obtain payment by the Note Insurer of such voided Scheduled Payment,
and shall, at the time it provides notice to the Note Insurer, 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 FSA Policy, a copy of which shall be made available through the
Indenture Trustee, the Note Insurer or the Fiscal Agent, if any, and the
Indenture Trustee shall furnish to the Note Insurer 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 Note Insurer of
either of the following as to which it has actual knowledge: (i) the
commencement of any Proceeding by or against the Note Insurer commenced under
the Bankruptcy Code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") 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 a Note, and the Indenture Trustee hereby agrees that, so long as a
Note Insurer Default shall not have occurred and be continuing, Note Insurer
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 the
Note Insurer but subject to reimbursement as provided in the FSA 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,
the Note Insurer 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 Holders 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 Proceeding.
(c) The Indenture Trustee shall furnish to the Note Insurer or its
Fiscal Agent its records evidencing the Scheduled 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.
Section 8.17. Effect of Payments by the Note Insurer; Subrogation.
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 FSA Policy 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 4.01 hereof. The Issuer and the Indenture
Trustee acknowledge that without the need for any further action on the part
of the Note Insurer, the Issuer, the Indenture Trustee or the Note Registrar
(i) to the extent the Note Insurer makes payments, directly or indirectly, on
account of principal of or interest on the Notes to the Holders of such Notes,
the Note Insurer will be fully subrogated to the rights of such Holders to
receive such principal and interest from the Issuer, and (ii) the Note Insurer
shall be paid such principal and interest in its capacity as a Holder of the
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 as provided in
Section 8.02(d).
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent Of Noteholders.
With the consent of the Note Insurer and without the consent of the
Holders of any Notes, the Issuer and the Indenture Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto,
in form satisfactory to the Indenture Trustee, for any of the following
purposes:
(1) 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;
(2) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of any Notes, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(3) to evidence the succession of another Person to the Issuer to
the extent permitted herein, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes contained;
(4) to add to the covenants of the Issuer, for the benefit of the
Holders of all Notes and the Note Insurer or to surrender any right or
power herein conferred upon the Issuer;
(5) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision
herein, or to amend any other provisions with respect to matters or
questions arising under this Indenture, which shall not be inconsistent
with the provisions of this Indenture, provided that such action shall
not adversely affect in any material respect the interests of the Holders
of the Notes or the Holders of the Investor Certificate; and provided,
further, that the amendment shall not be deemed to adversely affect in
any material respect the interests of the Holders of the Notes and the
Note Insurer if the Person requesting the amendment obtains letters from
the Rating Agencies that the amendment would not result in the
downgrading or withdrawal of the implied ratings then assigned to the
Notes (without taking into account the FSA Policy); or
(6) 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.
Section 9.02. Supplemental Indentures With Consent Of Noteholders.
With the consent of the Note Insurer and with the consent of Holders of
Notes representing not less than a majority of the Note Balance of all
Outstanding Notes by Act of said Holders delivered to the Issuer and the
Indenture Trustee, the Issuer and the Indenture Trustee may 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 Outstanding Note
affected thereby:
(1) change any Payment Date or the Final Maturity Date of the
Notes or reduce the principal amount thereof, the Note Interest Rate
thereon or the Redemption Price with respect thereto, change the
earliest date on which any Note may be redeemed at the option of the
Issuer, change any place of payment where, or the coin or currency
in which, any Note or any interest thereon is payable, or impair the
right to institute suit for the enforcement of the payment of any
installment of interest due on any Note on or after the Final
Maturity Date thereof or for the enforcement of the payment of the
entire remaining unpaid principal amount of any Note on or after the
Final Maturity Date (or, in the case of redemption, on or after the
applicable Redemption Date);
(2) reduce the percentage of the Note Balance of the
Outstanding 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 provisions of
this Indenture or Defaults hereunder and their consequences provided
for in this Indenture;
(3) modify any of the provisions of this Section, Section 5.13,
Section 5.14 or Section 5.17(b), except to increase any percentage
specified therein or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Note affected thereby;
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(5) permit the creation of any lien other than the lien of this
Indenture with respect to any part of the Trust Estate (except for
Permitted Encumbrances) or terminate the lien of this Indenture on
any property at any time subject hereto or deprive the Holder of any
Note of the security afforded by the lien of this Indenture;
(6) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the Required Payment Amount
for any Payment Date (including the calculation of any of the
individual components of such Required Payment Amount) or to affect
rights of the Holders of the Notes to the benefits of any provisions
for the mandatory redemption of Notes contained herein; or
(7) incur any indebtedness, other than the Notes, that would
cause the Issuer or the Trust Estate to be treated as a "taxable
mortgage pool" within the meaning of Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such 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 accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Indenture Trustee shall be
entitled to receive, and (subject to Section 6.01) 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
or immunities under this Indenture or otherwise. The Issuer shall cause
executed copies of any Supplemental Indentures to be delivered to the Rating
Agencies and the Note Insurer.
Section 9.04. Effect Of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Notes to which such supplemental indenture relates that have
theretofore been or thereafter are authenticated and delivered hereunder shall
be bound thereby.
Section 9.05. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
Section 9.06. Reference In Notes To Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as to
any matter provided for in such supplemental indenture. If the Issuer shall so
determine, new Notes so modified as to conform, in the opinion of 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.
Section 9.07. Amendments To Governing Documents.
The Indenture Trustee shall, with the consent of the Note Insurer,
subject to Sections 9.01 and 9.02 hereof, upon Issuer Request, consent to any
proposed amendment to the Issuer's governing documents, or an amendment to or
waiver of any provision of any other document relating to the Issuer's
governing documents, such consent to be given without the necessity of
obtaining the consent of the Holders of any Notes upon receipt by the
Indenture Trustee of:
(i) an Officers' Certificate, to which such proposed amendment or
waiver shall be attached, stating that such attached copy is a true copy
of the proposed amendment or waiver and that all conditions precedent to
such consent specified in this Section 9.07 have been satisfied; and
(ii) written confirmation from the Rating Agencies that the
implementation of the proposed amendment or waiver will not adversely
affect their implied ratings of the Notes (without taking into account
the FSA Policy).
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own
rights, duties or immunities under this Indenture or otherwise or to any
proposed waiver or amendment of Section 3.02 of the Trust Agreement.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver
or any provision of any document where the making of such amendment or the
giving of such waiver without obtaining the consent of the Indenture Trustee
is not prohibited by this Indenture or by the terms of the document that is
the subject of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption.
(a) All the Notes may be redeemed in whole, but not in part, on the
Redemption Date as provided in clause (i) of the definition thereof at the
Redemption Price at the option of the holders of a majority of the ownership
interest of the Issuer (the "Residual Majority"); provided, however, that
funds in an amount equal to the Redemption Price, plus any amounts owed to the
Note Insurer under the FSA Insurance Agreement any unreimbursed Nonrecoverable
Advances and any unreimbursed amounts due and owing to the Indenture Trustee
hereunder, must be deposited with the Indenture Trustee no later than 10:00
a.m. New York City time on the Redemption Date or the Issuer shall have
complied with the requirements for satisfaction and discharge of the Notes
specified in Section 4.01 (other than Section 4.01(2)). Notice of the election
to redeem the Notes shall be furnished to the Indenture Trustee not later than
thirty (30) days prior to the Payment Date selected for such redemption,
whereupon all such Notes shall be due and payable on such Payment Date upon
the furnishing of a notice pursuant to Section 10.02 to each Holder of such
Notes and the Note Insurer. Upon the redemption of the Notes, Mortgage Loans
in the Trust Estate shall be released and delivered to the owners of the Trust
Certificate.
(b) [Reserved]
(c) (i) Following the first Payment Date on which the Aggregate
Principal Balance of the Mortgage Loans as of the related Determination Date
is 10% or less of the Cut-off Date Aggregate Principal Balance of the Mortgage
Loans as of the Cut-off Date (unless the Notes shall have been redeemed
pursuant to this Section 10.01), the Indenture Trustee shall solicit bids for
the purchase of the Mortgage Loans and the Trust Estate. If the highest bid
received by the Indenture Trustee from a qualified bidder is not less than the
fair market value of the Mortgage Loans and would equal or exceed the amount
set forth in clause (ii) below, the Indenture Trustee shall notify the Seller
and the Master Servicer of the bid price.
(ii) The Seller shall have the right of first refusal to
purchase the Mortgage Loans at such bid price (or if the Seller does not
exercise such right, the Master Servicer may exercise such first refusal
rights to purchase the Mortgage Loans at the bid price). If the Seller
and the Master Servicer affirmatively waive in writing their respective
first refusal rights, then the Indenture Trustee shall sell and assign
such Mortgage Loans without recourse to the highest bidder and shall
redeem the Notes. The Indenture Trustee shall not consummate the sale
unless the bid price is at least equal to an amount, which, when added to
Available Funds for the related Payment Date, would equal the sum,
without duplication, of (i) the accrued interest then due on such Payment
Date, (ii) the aggregate Note Balance as of such Payment Date, (iii) the
aggregate of all amounts owed to the Note Insurer or that will be owed to
the Note Insurer as a result of such sale pursuant to the FSA Insurance
Agreement, (iv) any accrued and unpaid Master Servicing Fees and any
Servicing Advances and Monthly Advances (including Nonrecoverable
Advances) previously made by the Master Servicer and remaining
unreimbursed as of such Payment Date and (v) any accrued and unpaid fees
and other amounts owing to the Indenture Trustee or the Owner Trustee as
of such Payment Date. If such conditions are not met, the Indenture
Trustee shall not consummate such sale.
(iii) The Indenture Trustee shall not be required to consummate
a sale of the Mortgage Loans unless it receives an Opinion of Counsel
(with a copy to the Note Insurer) (which Opinion of Counsel shall not be
at the expense of the Indenture Trustee) that such sale will not give
rise to any adverse tax consequences to the Issuer or the Noteholders or
adversely affect the opinion that the Notes will evidence indebtedness of
the Issuer under the Code.
(iv) In the event that a sale is not consummated in accordance
with this Section 10.01(c), the Indenture Trustee shall solicit bids on a
quarterly basis for the purchase of such assets upon the terms described
in this Section.
(v) The proceeds of the sale of the Mortgage Loans shall be
used to redeem the Notes and to pay all amounts set forth in clause (ii)
above then due and owing, and any excess shall be deposited in the
Certificate Distribution Account for payment to the Certificateholders.
Section 10.02. Form Of Redemption Notice.
Notice of redemption shall be given by the Indenture Trustee in the name
of and at the expense of the Issuer by first class mail, postage prepaid,
mailed not less than ten days prior to the Redemption Date to each Holder of
Notes to be redeemed, such Holders being determined as of the Record Date for
such Payment Date, and to the Note Insurer.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price at which the Notes of such Series will be
redeemed,
(3) the fact of payment in full on such Notes, the place where such
Notes are to be surrendered for payment of the Redemption Price (which
shall be the office or agency of the Issuer to be maintained as provided
in Section 3.02), and that no interest shall accrue on such Note for any
period after the date fixed for redemption.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
Section 10.03. Notes Payable On Optional Redemption.
Notice of redemption having been given as provided in Section 10.02, the
Notes to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of
the Redemption Price) no interest shall accrue on such Redemption Price for
any period after such Redemption Date; provided, however, that if such
Redemption Price is not paid on the Redemption Date, the Note Balance shall,
until paid, bear interest from the Redemption Date at the Note Interest Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates And Opinions.
(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 the Note Insurer an Officers'
Certificate stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel (with a copy to the Note Insurer), if requested by the
Indenture Trustee, 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 relating
to such particular application or request, no additional certificate or
opinion need be furnished.
(b) Every certificate, opinion or letter with respect to compliance
with a condition or covenant provided for in this Indenture, including one
furnished pursuant to specific requirements of this Indenture relating to a
particular application or request (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include and shall be deemed to include
(regardless of whether specifically stated therein) the following:
(1) a statement that each individual signing such certificate,
opinion or letter has 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, opinion or letter are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 11.02. 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 the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect
to the matters upon which his certificate or opinion is based are erroneous.
Any Opinion of Counsel may be based on the written opinion of other counsel,
in which event such Opinion of Counsel shall be accompanied by a copy of such
other counsel's opinion and shall include a statement to the effect that such
counsel believes that such counsel and the Indenture Trust may reasonably rely
upon the opinion of such other counsel.
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.
Wherever 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 Section 6.01(b)(2).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Indenture Trustee at the request
or direction of the Issuer, then, notwithstanding that the satisfaction of
such condition is a condition precedent to the Issuer's right to make such
request or direction, the Indenture Trustee shall be protected in acting in
accordance with such request or direction if it does not have knowledge of the
occurrence and continuation of such Default or Event of Default as provided in
Section 6.01(d).
Section 11.03. 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 an
agent 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.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership,
such certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The ownership of Notes shall be proved by the Note Register.
(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 of transfer 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 Notes.
Section 11.04. Notices, Etc. , To Indenture Trustee, The Note Insurer And
Issuer
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(1) 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 and received by the Indenture Trustee at its
Corporate Trust Office and at 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx,
Xxxxxxxx 00000-0000 (in each case, Attention: Corporate Trust
Administration (AmREIT 1999-1)); or
(2) 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 it at American
Residential Eagle Bond Trust 1999-1, in care of Wilmington Trust Company,
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer; or
(3) the Note Insurer 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 Financial Security Assurance Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Transaction Oversight,
Re: American Residential Eagle Bond Trust 1999-1; Confirmation: (212)
826-0100; Telecopy Nos: (000) 000-0000 or (000) 000-0000 (in each case in
which notice or other communication to the Note Insurer refers to an
Event of Default (as defined in the FSA Insurance Agreement), a claim on
the FSA Policy or with respect to which failure on the part of FSA to
respond shall be deemed to constitute consent or acceptance, then a copy
of such notice or other communication should also be sent to the
attention of the General Counsel and the Head of the Financial Guaranty
Group and shall be marked to indicate "URGENT MATERIAL ENCLOSED"); or
(4) the Depositor by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage paid, to Bear Xxxxxxx Asset Backed Securities, Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at any other address
previously furnished in writing to the Indenture Trustee by the
Depositor; or
(5) the Seller or the Initial Seller by the Indenture Trustee or by
any Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage paid, to American Residential
Eagle, Inc., 000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxx Xxx, Xxxxxxxxxx
00000, Attention: Portfolio Manager, or at any other address previously
furnished in writing to the Indenture Trustee by the Seller or the
Servicer;
(6) the Master Servicer by the Indenture Trustee or the Note Insurer
for every purpose hereunder if in writing and mailed, first-class,
postage paid to Advanta Mortgage Corp. USA, 00000 Xxxxxx Xxxxxxxx Xxxx,
Xxx Xxxxx, Xxxxxxxxxx 00000; Attention: SVP Loan Servicing.
(7) the Underwriters by any party or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to Bear Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Structured Finance Department
(American Residential Eagle Bond Trust 1999-1).
(8) Bear Xxxxxxx Financial Products, Inc. for every purpose
hereunder if in writing and valid, first class, postage prepaid to 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: DPC Manager - Suite
1700.
Notices required to be given to the Rating Agencies by the Issuer or the
Indenture Trustee shall be in writing, personally delivered or mailed
first-class postage pre-paid, to (i) in the case of Moody's, at the following
address: Xxxxx'x Investors Service, Inc., Residential Mortgage 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 Group,
00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx, 00000, Attention: Asset Bankers
Surveillance Department; or as to each of the foregoing, at such other address
as shall be designed by written notice to the other parties.
Section 11.05. Notices And Reports To Noteholders; Waiver Of Notices.
Where this Indenture provides for notice to Noteholders of any event or
the mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder
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 or
the mailing of such report. In any case where a notice or report to
Noteholders is mailed in the manner provided above, neither the failure to
mail such notice or report, nor any defect in any notice or report so mailed,
to any particular Noteholder shall affect the sufficiency of such notice or
report with respect to other Noteholders, and any notice or report that is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to
mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Section 11.06. Rules By Indenture Trustee.
The Indenture Trustee may make reasonable rules for any meeting of
Noteholders.
Section 11.07. 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 TIA, such required provision shall control.
Section 11.08. Effect Of Headings And Table Of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 11.09. Successors And Assigns.
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
Section 11.10. 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 11.11. Benefits Of Indenture.
Nothing in this Indenture or in the Notes, expressed or implied, shall
give to any Person, other than the parties hereto, the Note Insurer and their
successors hereunder, any separate trustee or Co-trustee appointed under
Section 6.14 and the Noteholders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 11.12. Legal Holidays.
In any case where the date of any Payment Date, Redemption Date or any
other date on which principal of or interest on any Note is proposed to be
paid 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 nominal date of any such Payment Date, Redemption Date or other
date for the payment of principal of or interest on any Note and no interest
shall accrue for the period from and after any such nominal date, provided
such payment is made in full on such next succeeding Business Day.
Section 11.13. Governing Law.
IN VIEW OF THE FACT THAT NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY
STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH
CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY
OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE
CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 11.14. Counterparts.
This instrument 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 11.15. Recording Of Indenture.
This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to
Section 2.11(c) or 3.06.
Section 11.16. 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 the Trust
Agreement.
Section 11.17. No Petition.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Beneficial Owner, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Issuer, or join in
any institution against the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, this Indenture or any of the Basic
Documents. In addition, the Indenture Trustee will on behalf of the holders of
the Notes, (a) file a written objection to any motion or other proceeding
seeking the substantive consolidation of the Seller with, the Issuer, (b) file
an appropriate memorandum of points and authorities or other brief in support
of such objection, or (c) endeavor to establish at the hearing on such
objection that the substantive consolidation of such entity would be
materially prejudicial to the Noteholders.
This Section 11.17 will survive for one year and one day following the
termination of this Indenture.
Section 11.18. Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee and the Note Insurer, during the
Issuer's normal business hours, to examine all of 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 Accountants selected by the
Indenture Trustee or the Note Insurer, as the case may be, and to discuss its
affairs, finances and accounts with its officers, employees and Independent
Accountants (and by this provision the Issuer hereby authorizes its
Accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested.
Section 11.19. Usury.
The amount of interest payable or paid on any Note under the terms of
this Indenture shall be limited to an amount that shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the United
States or the State of New York (whichever shall permit the higher rate), that
could lawfully be contracted for, charged or received (the "Highest Lawful
Rate"). In the event any payment of interest on any Note exceeds the Highest
Lawful Rate, the Issuer stipulates that such excess amount will be deemed to
have been paid as a result of an error on the part of both the Indenture
Trustee, acting on behalf of the Holder of such Note, and the Issuer, and the
Holder receiving such excess payment shall promptly, upon discovery of such
error or upon notice thereof from the Issuer or the Indenture Trustee, refund
the amount of such excess or, at the option of the Indenture Trustee, apply
the excess to the payment of principal of such Note, if any, remaining unpaid.
In addition, all sums paid or agreed to be paid to the Indenture Trustee for
the benefit of Holders of Notes for the use, forbearance or detention of money
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Notes.
Section 11.20. Third Party Beneficiary.
The Note Insurer is intended as a third party beneficiary of this
Indenture shall be binding upon and inure to the benefit of the Note Insurer;
provided that, notwithstanding the foregoing, for so long as a Note Insurer
Default is continuing with respect to its obligations under the FSA Policy,
the Noteholders shall succeed to the Note Insurer's rights hereunder other
than the rights of the Note Insurer to receive payments hereunder. Without
limiting the generality of the foregoing, all covenants and agreements in this
Indenture that expressly confer rights upon the Note Insurer shall be for the
benefit of and run directly to the Note Insurer, and the Note Insurer shall be
entitled to rely on and enforce such covenants to the same extent as if it
were a party to this Indenture.
Section 11.21. Limitation of Liability of Wilmington Trust Company.
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as Owner Trustee of the Issuer in the
exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of
the Issuer is made and intended not as personal representations, undertakings
and agreements by Xxxxxxxxxx Trust Company but is made and intended for the
purpose for binding only the Issuer, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties
hereto and by any Person claiming by, through or under the parties hereto and
(d) under no circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Issuer or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Issuer under this Agreement or any other related
document.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee and the have
caused this Indenture to be duly executed by their respective officers
thereunto duly authorized, all as of the day and year first above written.
AMERICAN RESIDENTIAL EAGLE BOND
TRUST 1999-1
By: Wilmington Trust Company,
as Owner Trustee
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Authorized Signatory
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Indenture Trustee
By: /s/ Xxx Xxxx
------------------------------------
Name: Xxx Xxxx
Title: Assistant Vice President
[Signature Page to Indenture]
EXHIBIT A
SCHEDULE OF MORTGAGE LOANS
Refer to Tab 34
EXHIBIT A FORM OF NOTE
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 NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT
OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE FSA POLICY AS
PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE
PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Date of Indenture: As of April 1, 1999 CUSIP No.: [[ ]]
First Payment Date: May 25, 1999 Note No.: 001
Aggregate Note Balance of all Notes: $[[ ]]
AMERICAN RESIDENTIAL EAGLE BOND TRUST 19991
MORTGAGE-BACKED LIBOR NOTES, CLASS A, SERIES 1999-1
American Residential Eagle Bond Trust 1999-1, a Delaware statutory
business trust organized and existing under the laws of the State of Delaware
(herein referred to as the "Issuer"), for value received, hereby promises to
pay to CEDE & CO., or registered assigns, the principal sum of $[[ ]] payable
on each Payment Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $[[ ]] and the denominator of which
is $[[ ]] (this Note's "Percentage Interest") by (ii) the aggregate amount, if
any, payable from the Note Payment Account in respect of principal on the
Notes pursuant to the Indenture dated as of April 1, 1999, between the Issuer
and Norwest Bank Minnesota, National Association, a national banking
association, as Indenture Trustee (the "Indenture Trustee"); provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the earlier of (i) the Payment Date occurring in [[ ]] (the "Final
Maturity Date"), (ii) the Redemption Date, if any, pursuant to Article X of
the Indenture or (iii) the date on which an Event of Default shall have
occurred and be continuing, if the Notes have been declared to be immediately
due and payable in the manner provided in Section 5.02 of the Indenture.
Capitalized terms used but not defined herein are defined in Article I of the
Indenture.
Pursuant to the terms of the Indenture, payments will be made on the 25th
day of each month or, if such day is not a Business Day, on the Business Day
immediately following such 25th day (each a "Payment Date"), commencing on the
first Payment Date specified above, to the Person in whose name this Note is
registered at the close of business on the applicable Record Date, in an
amount equal to the product of (a) the Percentage Interest evidenced by this
Note and (b) the sum of the amounts to be paid on the Notes with respect to
such Payment Date, all as more specifically set forth in the Indenture.
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 check mailed to the Person whose name
appears as the 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 Clearing 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. Notwithstanding the foregoing, in the case of Definitive
Notes, upon written request at least five days prior to the related Record
Date with appropriate instructions by the Holder of this Note (holding an
aggregate initial Note Balance of at least $1,000,000), any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder reasonably satisfactory to the Indenture Trustee.
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
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 Indenture Trustee's principal Corporate Trust Office or at
the office of the Indenture Trustee's maintained for such purpose.
Payments of principal and interest on the Notes will be made on each
Payment Date to Noteholders of record as of the related Record Date. On each
Payment Date, Noteholders will be entitled to receive interest payments in an
aggregate amount equal to the Monthly Interest Amount for such Payment Date,
together with principal payments in an aggregate amount equal to the Monthly
Principal Amount plus, until the Overcollateralization Amount is equal to the
Required Overcollateralization Amount, Excess Cash, if any, for such Payment
Date. The "Note Balance" of a Note as of any date of determination is equal to
the initial principal balance thereof as of the Closing Date, reduced by the
aggregate of all amounts previously paid with respect to such Note on account
of principal.
The Issuer will pay Monthly Interest on this Note on every Payment Date
until the Principal Balance of this Note is paid in full at a per annum rate
equal to the least of (i) the applicable Formula Rate, (ii) the applicable CAP
Rate and (iii) the applicable Net Funds Cap, taking in to account whether such
Payment Date occurs on or prior to the Initial Redemption Date. The Holder of
this Note may also be entitled to receive certain additional payments of
interest on this Note up to the amount of any Basis Risk Shortfall for the
related Payment Date to the extent of any Supplemental Interest Payments made
under the FSA Policy (as defined below) on such Payment Date. To the extent
such Supplemental Interest Payment is less than the related Basis Risk
Shortfall, a Noteholder may be entitled to payment of LIBOR Carryover Amounts
on subsequent Payment Dates, but only to the extent that Available Funds
applied in the order of priorities set forth in the Indenture are sufficient
on subsequent Payment Dates to cover such Basis Risk Shortfall.
The 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.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Mortgage-Backed LIBOR Notes, Class A, Series 1999-1, 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. To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the Mortgage
Loans and the other collateral related thereto pledged as security therefor as
provided in the Indenture.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Final Maturity Date and the
Redemption Date, if any, pursuant to Article X of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing if the Indenture Trustee, at the direction or upon
the prior written consent of Financial Security Assurance Inc. (the "Note
Insurer") in the absence of a Note Insurer Default, or the Holders of the
Notes representing not less than 50% of the Note Balance of the Outstanding
Notes (with the prior written consent of the Note Insurer in the absence of a
Note Insurer Default), shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
and interest payments on the Notes shall be made pro rata to the Noteholders
entitled thereto.
The Note Insurer, in consideration of the payment of the premium and
subject to the terms of the Financial Guaranty Insurance Policy (the "FSA
Policy") thereby has unconditionally and irrevocably guaranteed the payment of
the Scheduled Payments as described in the such Policy attached hereto.
Pursuant to the Indenture, unless a Note Insurer Default exists (i) the
Note Insurer shall be deemed to be the holder of the Notes for certain
purposes specified in the Indenture and will be entitled to exercise all
rights of the Noteholders thereunder, including the rights of Noteholders
relating to the occurrence of, and the remedies with respect to, an Event of
Default, without the consent of such Noteholders, and (ii) the Indenture
Trustee may take actions which would otherwise be at its option or within its
discretion, including actions relating to the occurrence of, and the remedies
with respect to, an Event of Default, only at the direction of the Note
Insurer. In addition, on each Payment Date, after the Noteholders have been
paid all amounts to which they are entitled, the Note Insurer will be entitled
to be reimbursed for any unreimbursed Scheduled Payments, unreimbursed Premium
Amounts (each with interest thereon at the "Late Payment Rate" specified in
the FSA Insurance Agreement) and any other amounts owed under the FSA Policy.
The Issuer shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate and payments under the FSA Policy will be the sole source of
payments on the Notes, and each Holder hereof, by its acceptance of this Note,
agrees that (i) such Note will be limited in right of payment to amounts
available from the Trust Estate and the FSA Policy as provided in the
Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner
Trustee, the Indenture Trustee, the Depositor, the Initial Seller, the Seller,
the Master Servicer or any of their respective affiliates, or to the assets of
any of the foregoing entities, except the assets of the Issuer pledged to
secure the Notes pursuant to the Indenture.
As provided in the Indenture, the Notes may be redeemed in whole, but not
in part, by the Issuer at the direction of the Investor Certificateholder of
the Trust, on any Payment Date on and after the date on which the Aggregate
Principal Balance of the Mortgage Loans is 20% or less of the Aggregate
Principal Balance as of the Cut-off Date upon the payment of the redemption
price for the Notes specified in Section 10.01 of the Indenture. As provided
in the Indenture, on any Payment Date on and after the date on which the
Aggregate Principal Balance of the Mortgage Loans is equal to 10% or less of
the Aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date,
and quarterly thereafter, the Indenture Trustee is required to solicit
competitive bids for the purchase of the Mortgage Loans. In the event that
satisfactory bids are received as described in the Indenture (but subject to
the rights of first refusal of the Seller and Master Servicer to purchase the
Mortgage Loans at such bid price), the Notes will be redeemed.
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 office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Note Registrar duly executed by, the Holder hereof or such Xxxxxx'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 of 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 transferor may
be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of
transfer or exchange.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the
case of a Beneficial Owner, 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 or the Indenture Trustee on
the Notes or under the Indenture or any certificate or other writing delivered
in connection therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution or failure
to pay any installment or call owing to such entity.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the
case of a Beneficial Owner, a beneficial interest in a Note, covenants and
agrees by accepting the benefits of the Indenture that such Noteholder or
Beneficial Owner will not at any time institute against the Issuer, or join in
any institution against 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, the Initial Mortgage Loan Purchase
Agreement, the Mortgage Loan Purchase Agreement, the Master Servicing
Agreement, the Management Agreement, the FSA Insurance Agreement and the
Indemnification Agreement (the "Basic Documents").
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Beneficial Owner 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 (as of the day of
determination or as of such other date as may be specified in the Indenture)
is registered as the owner hereof for all purposes, whether or not this 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 rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Note Insurer and the Holders of
Notes representing a majority of the Note Balance of all Outstanding Notes.
The Indenture also contains provisions permitting the (i) Note Insurer or (ii)
if a Note Insurer Default exists, the Holders of Notes representing specified
percentages of the Note Balance of Outstanding 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 Note Insurer or by the Holder
of this Note (or any one or 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 amendment thereof, in certain
limited circumstances, or the waiver of certain terms and conditions set forth
in the Indenture, without the consent of Holders of the Notes issued
thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
Initially, the Notes will be represented by one Note registered in the
name of CEDE & Co. as nominees of the Clearing Agency. The Notes will be
delivered in denominations as provided in the Indenture and subject to certain
limitations therein set forth. The Notes are exchangeable for a like aggregate
initial Note Balance of Notes of different authorized denominations, as
requested by the Holder surrendering the same.
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent 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.
IN WITNESS WHEREOF, the Issuer has caused this Instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
DATE: April [[ ]], 1999
AMERICAN RESIDENTIAL EAGLE BOND
TRUST 1999-1
By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner Trustee
under the Trust Agreement
By:_____________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: April [[ ]], 1999
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
Authenticating Agent
By:_________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________________________________, attorney, to
transfer said Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated: ____________________*/
Signature Guaranteed: ___________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may
be determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
FSA POLICY
EXHIBIT C
FORM OF NOTICE OF CLAIM
