EXHIBIT 4.4
_____ TRUST SERIES ____-__
Issuer
AND
[NAME OF INDENTURE TRUSTEE]
Indenture Trustee
INDENTURE
Dated as of ________________
__________________________________________
ASSET-BACKED NOTES
_____________
TABLE OF CONTENTS
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Section Page
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ARTICLE I
Definitions..............................................................................................2
Section 1.01 DEFINITIONS...................................................................2
Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.............................2
Section 1.03 RULES OF CONSTRUCTION.........................................................2
ARTICLE II
Original Issuance of Notes...............................................................................3
Section 2.01 FORM..........................................................................3
Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY........................................3
ARTICLE III
Covenants................................................................................................4
Section 3.01 COLLECTION OF PAYMENTS WITH RESPECT TO LOANS..................................4
Section 3.02 MAINTENANCE OF OFFICE OR AGENCY...............................................4
Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT..........................4
Section 3.04 EXISTENCE.....................................................................5
Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.........................6
Section 3.06 PROTECTION OF TRUST ESTATE....................................................9
Section 3.07 OPINIONS AS TO TRUST ESTATE...................................................9
Section 3.08 PERFORMANCE OF OBLIGATIONS; SERVICING AGREEMENT..............................10
Section 3.09 NEGATIVE COVENANTS...........................................................10
Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE............................................11
Section 3.11 REPRESENTATIONS AND WARRANTIES CONCERNING THE LOANS..........................11
Section 3.12 ASSIGNEE OF RECORD OF THE LOANS..............................................11
Section 3.13 INVESTMENT COMPANY ACT.......................................................11
Section 3.14 SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE........................12
Section 3.15 ISSUER MAY CONSOLIDATE, ETC..................................................12
Section 3.16 SUCCESSOR OR TRANSFEREE......................................................14
Section 3.17 NO OTHER BUSINESS............................................................14
Section 3.18 NO BORROWING.................................................................14
Section 3.19 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES............................14
Section 3.20 CAPITAL EXPENDITURES.........................................................14
Section 3.21 OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED DOCUMENTS
..............................................................................................14
Section 3.22 RESTRICTED PAYMENTS..........................................................14
Section 3.23 NOTICE OF EVENTS OF DEFAULT..................................................15
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Section 3.24 FURTHER INSTRUMENTS AND ACTS.................................................15
Section 3.25 STATEMENTS TO NOTEHOLDERS....................................................15
Section 3.26 ALLOCATION OF REALIZED LOSSES................................................15
Section 3.27 DETERMINATION OF THE LIBOR RATE..............................................15
Section 3.28 LIQUIDATION ON FINAL MATURITY DATE...........................................16
Section 3.29 NO RECOURSE..................................................................16
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture......................................................17
Section 4.01 THE NOTES....................................................................17
Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF NOTES;
APPOINTMENT OF CERTIFICATE REGISTRAR...........................................................17
Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN NOTES...................................19
Section 4.04 PERSONS DEEMED OWNERS........................................................20
Section 4.05 CANCELLATION.................................................................20
Section 4.06 BOOK-ENTRY NOTES.............................................................20
Section 4.07 NOTICES TO DEPOSITORY........................................................21
Section 4.08 DEFINITIVE NOTES.............................................................21
Section 4.09 TAX TREATMENT................................................................22
Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE......................................22
Section 4.11 APPLICATION OF TRUST MONEY...................................................23
Section 4.12 [RESERVED]...................................................................23
Section 4.13 REPAYMENT OF MONIES HELD BY PAYING AGENT.....................................23
Section 4.14 TEMPORARY NOTES..............................................................23
ARTICLE V
Default and Remedies....................................................................................24
Section 5.01 EVENTS OF DEFAULT............................................................24
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT...........................24
Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE
TRUSTEE........................................................................................25
Section 5.04 REMEDIES; PRIORITIES.........................................................27
Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE....................................28
Section 5.06 LIMITATION OF SUITS..........................................................28
Section 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.......................................................................................29
Section 5.08 RESTORATION OF RIGHTS AND REMEDIES...........................................29
Section 5.09 RIGHTS AND REMEDIES CUMULATIVE...............................................30
Section 5.10 DELAY OR OMISSION NOT A WAIVER...............................................30
Section 5.11 CONTROL BY NOTEHOLDERS.......................................................30
Section 5.12 WAIVER OF PAST DEFAULTS......................................................30
Section 5.13 UNDERTAKING FOR COSTS........................................................31
Section 5.14 WAIVER OF STAY OR EXTENSION LAWS.............................................31
Section 5.15 SALE OF TRUST ESTATE.........................................................31
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Section 5.16 ACTION ON NOTES..............................................................33
ARTICLE VI
The Indenture Trustee...................................................................................33
Section 6.01 DUTIES OF INDENTURE TRUSTEE..................................................33
Section 6.02 RIGHTS OF INDENTURE TRUSTEE..................................................34
Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE.......................................34
Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER...............................................35
Section 6.05 NOTICE OF EVENT OF DEFAULT...................................................35
Section 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS......................................35
Section 6.07 COMPENSATION AND INDEMNITY...................................................35
Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE.............................................36
Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER........................................37
Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE
..............................................................................................37
Section 6.11 ELIGIBILITY; DISQUALIFICATION................................................38
Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.............................38
Section 6.13 REPRESENTATIONS AND WARRANTIES...............................................38
Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE..............................................39
Section 6.15 INDENTURE TRUSTEE MAY OWN SECURITIES.........................................39
Section 6.16 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.....................................39
ARTICLE VII
Noteholders' Lists and Reports..........................................................................40
Section 7.01 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders....................................................................................40
Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS
..............................................................................................40
Section 7.03 REPORTS BY ISSUER............................................................40
Section 7.04 REPORTS BY INDENTURE TRUSTEE.................................................41
ARTICLE VIII
Accounts, Disbursements and Releases....................................................................41
Section 8.01 COLLECTION OF MONEY..........................................................41
Section 8.02 TRUST ACCOUNTS...............................................................41
Section 8.03 OFFICER'S CERTIFICATE........................................................42
Section 8.04 TERMINATION UPON PAYMENT TO NOTEHOLDERS......................................42
Section 8.05 RELEASE OF TRUST ESTATE......................................................42
Section 8.06 SURRENDER OF NOTES UPON FINAL PAYMENT........................................42
ARTICLE IX
Supplemental Indentures.................................................................................43
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Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.......................43
Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS..........................44
Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES.........................................46
Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE.............................................46
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT..........................................46
Section 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES................................46
ARTICLE X
Miscellaneous...........................................................................................47
Section 10.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC....................................47
Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.............................48
Section 10.03 ACTS OF NOTEHOLDERS..........................................................49
Section 10.04 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING AGENCIES
..............................................................................................50
Section 10.05 NOTICES TO NOTEHOLDERS; WAIVER...............................................50
Section 10.06 ALTERNATE PAYMENT AND NOTICE PROVISIONS......................................51
Section 10.07 CONFLICT WITH TRUST INDENTURE ACT............................................51
Section 10.08 EFFECT OF HEADINGS...........................................................51
Section 10.09 SUCCESSORS AND ASSIGNS.......................................................51
Section 10.10 SEPARABILITY.................................................................51
Section 10.11 BENEFITS OF INDENTURE........................................................51
Section 10.12 LEGAL HOLIDAYS...............................................................51
Section 10.13 GOVERNING LAW................................................................52
Section 10.14 COUNTERPARTS.................................................................52
Section 10.15 RECORDING OF INDENTURE.......................................................52
Section 10.16 ISSUER OBLIGATION............................................................52
Section 10.17 NO PETITION..................................................................52
Section 10.18 INSPECTION...................................................................53
EXHIBITS
Exhibit A-1 Form of Class A Notes
Exhibit A-2 Form of Class M Notes
Exhibit A-3 Form of Class B Notes
Exhibit C Form of Rule 144A Investment Representation
Exhibit D Form of Investor Representation Letter
Exhibit E Form of Transferor Representation Letter
Appendix A Definitions
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This Indenture, dated as of ____________________, between _____ Trust
Series ____- __, a Delaware statutory trust, as Issuer (the "Issuer"), and [Name
of Indenture Trustee], as Indenture Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Series
____-__ Asset-Backed Notes, Class A, Class M-1, Class M-2, Class B-1 and Class
B-2 (collectively, the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of each Class of Notes, all of the
Issuer's right, title and interest in, to and under, whether now existing or
hereafter created, (i) the Loans and all payments and other collections in
respect of the Loans received or due after the Cut-off Date, (ii) the Loan
Purchase Agreements, (iii) any real property acquired on behalf of the Issuer,
(iv) such funds as from time to time are deposited in the in the Payment Account
and in all proceeds thereof; and (v) all present and future claims, demands,
causes and choses in action in respect of any or all of the foregoing and all
payments on or under, and all proceeds of every kind and nature whatsoever in
respect of, any or all of the foregoing and all payments on or under, and all
proceeds of every kind and nature whatsoever in the conversion thereof,
voluntary or involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, checks, deposit
accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I
Definitions
Section 1.01 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
"TIA"), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.03 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
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(vi) any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to
its permitted successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01 FORM. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit A, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibits A-1, A-2 and A-3 are part
of the terms of this Indenture.
Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Notes for original issue in an aggregate initial principal amount of
$_________.
Each Class of Notes shall be dated the date of its authentication. The
Book-Entry Notes shall be issuable in book-entry format and shall be issuable in
the minimum initial Note Balances of $25,000 and in integral multiples of $1 in
excess thereof. The Physical Notes will be evidenced by a physical, fully
registered Note transferable through the facilities of the Note Registrar and
shall be issuable in the minimum initial Note Balances of $25,000 and in
integral multiples of $1 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form
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provided for herein executed by the Indenture Trustee by the manual signature of
one of its authorized signatories, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
ARTICLE III
Covenants
Section 3.01 COLLECTION OF PAYMENTS WITH RESPECT TO LOANS. The
Indenture Trustee shall establish and maintain with itself the Payments Account
in which the Indenture Trustee shall, subject to the terms of this paragraph,
deposit, on the same day as it is received from the Servicer, each remittance
received by the Indenture Trustee with respect to the Loans. The Indenture
Trustee shall make all payments of principal and interest on the Notes, subject
to Section 3.03, as provided in Section 3.05 herein from monies on deposit in
the Payment Account.
Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the City of New York, an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT. (a)
As provided in Section 3.01, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the Payment
Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Payment Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of
this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee written notice of any default
by the Issuer of which it has actual knowledge in the making of any
payment required to be made with respect to the Notes;
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(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; and
(vi) deliver to the Indenture Trustee a copy of the report to
Noteholders prepared with respect to each Payment Date by the Servicer
pursuant to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04 EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and
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franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes and each other instrument or
agreement included in the Trust Estate.
Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST. (a)
On each Payment Date from amounts on deposit in the Payment Account the Paying
Agent shall pay to the Noteholders, the Certificate Paying Agent, on behalf of
the Certificateholders, and to other Persons the Interest Remittance Amount and
Principal Payment Amount, as set forth in the statements delivered to the
Indenture Trustee pursuant to Section 4.01 of the Servicing Agreement, in the
order of priority set forth in this Section 3.05.
(b) On each Payment Date, the Remittance Amount shall be distributed in
the following priority, in each case to the extent of the then remaining
Remittance Amount:
(i) first, to the Class A Notes, Current Interest and any
Carryforward Interest for each such Payment Date;
(ii) second, to the Class M-1 Notes, Current Interest and any
Carryforward Interest for such class and such Payment Date;
(iii) third, to the Class M-2 Notes, Current Interest and any
Carryforward Interest for such class and such Payment Date;
(iv) fourth, to the Class B-1 Notes, Current Interest and any
Carryforward Interest for such class and such Payment Date; and
(v) fifth, to the Class B-2 Notes, Current Interest and any
Carryforward Interest for such class and such Payment Date.
(c) On each Payment Date, prior to the Stepdown Date, the remaining
Remittance Amount after payments made pursuant to Section 3.01(b) above, not to
exceed the Principal Payment Amount, shall be distributed in the following order
of priority:
(i) first, to the Class A Notes, until their Class Principal
Balance of the Class A Notes has been reduced to zero;
(ii) second, to the Class M-1 Notes, until the Class Principal
Balance of the Class M-1 Notes has been reduced to zero;
(iii) third, to the Class M-2 Notes, until the Class Principal
Balance of the Class M-2 Notes has been reduced to zero;
(iv) fourth, to the Class B-1 Notes, until the Class Principal
Balance of the Class B-1 Notes has been reduced to zero; and
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(v) fifth, to the Class B-2 Notes, until the Class Principal
Balance of the Class B-2 Notes has been reduced to zero.
(d) On each Payment Date, on or after the Stepdown Date, the remaining
Remittance Amount after payments made pursuant to Section 3.01(b) and (c) above,
not to exceed the Principal Payment Amount, shall be distributed in the
following order of priority:
(i) first, to the Class A Notes, the Senior Principal Payment
Amount for such payment date, until the Class Principal Balance of the
Class A Notes has been reduced to zero;
(ii) second, to the Class M-1 Notes, the Class M-1 Principal
Payment Amount for such payment date, until the Class Principal Balance
of such Class has been reduced to zero;
(iii) third, to the Class M-2 Notes, the Class M-2 Principal
Payment Amount for such payment date, until the Class Principal Balance
of such Class has been reduced to zero;
(iv) fourth, to the Class B-1 Notes, the Class B-1 Principal
Payment Amount for such payment date, until the Class Principal Balance
of such Class has been reduced to zero; and
(v) fifth, to the Class B-2 Notes, the Class B-2 Principal
Payment Amount for such payment date, until the Class Principal Balance
of such Class has been reduced to zero.
(e) On each Payment Date, the Monthly Excess Cashflow shall be
distributed in the following order of priority:
(i) (A) on each Payment Date prior to the Stepdown Date, until
the aggregate Class Principal Balance of the Notes equals the Aggregate
Loan Balance for such Payment Date minus the Targeted
Overcollateralization Amount for such date, in the following order of
priority:
(1) first, to the Class A Notes until the Class
Principal Balance has been reduced to zero;
(2) second, to the Class M-1 Notes, until the Class
Principal Balance of such Class has been reduced to
zero;
(3) third, to the Class M-2 Notes, until the Class
Principal Balance of such Class has been reduced to
zero;
(4) fourth, to the Class B-1 Notes, until the Class
Principal Balance of such Class has been reduced to
zero; and
(5) fifth, to the Class B-2 Notes, until the Class
Principal Balance of such Class has been reduced to
zero.
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(B) On each Payment Date on or after the Stepdown
Date, to make any principal payments required to be made on such
payment date pursuant to Section 3.05(d), after giving effect to the
payment of the Principal Payment Amount for such date, in accordance
with the priorities set forth therein but without regard to the
limitation of such payments in the aggregate to the Principal Payment
Amount;
(ii) to the Class M-1 Notes, any Deferred Amount for such
class;
(iii) to the Class M-2 Notes, any Deferred Amount for such
class;
(iv) to the Class B-1 Notes, any Deferred Amount for such
class;
(v) to the Class B-2 Notes, any Deferred Amount for such
class;
(vi) to the Class A Notes, any applicable Basis Risk Shortfall
for each class;
(vii) to the Class M-2 Notes, any applicable Basis Risk
Shortfall for such class;
(viii) to the Class B-1 Notes, any applicable Basis Risk
Shortfall for such class;
(ix) to the Class B-2 Notes, any Available Funds Shortfall for
such class;
(x) to the Indenture Trustee, any Trustee Additional Expenses
and any amounts owing to the Indenture Trustee pursuant to Section 6.07
and the Owner Trustee pursuant to Article VII of the Trust Agreement,
in each case remaining unpaid; and
(xi) to the Certificate Paying Agent, all remaining Remittance
Amounts.
(f) On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of reimbursing the Owner Trustee with respect to
certain amounts and distributing such funds to the Class CE Certificateholder.
(g) The amounts paid to Noteholders shall be paid to the Notes in
accordance with the applicable percentage as set forth in paragraph (h) below.
Any installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall, if such Holder holds Notes of an aggregate initial Note Balance of
at least $1,000,000, be paid to each Holder of record on the preceding Record
Date, by wire transfer to an account specified in writing by such Holder
reasonably satisfactory to the Indenture Trustee as of the preceding Record Date
or in all other cases or if no such instructions have been delivered to the
Indenture Trustee, by check to such Noteholder mailed to such Holder's address
as it appears in the Note Register the amount required to be distributed to such
Holder on such Payment Date pursuant to such Holder's Securities; provided,
however, that the Indenture Trustee shall not pay to such Holders any amount
required to be withheld from a payment to such Holder by the Code.
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(h) The principal of each Note shall be due and payable in full on the
Final Scheduled Payment Date for such Note as provided in the related form of
Note set forth in Exhibits A-1, A-2 and A-3. All principal payments on the Notes
shall be made to the Noteholders entitled thereto in accordance with the
Percentage Interests represented by such Notes. The Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business on
the Record Date preceding the Final Scheduled Payment Date or other final
Payment Date. Such notice shall be mailed no later than five Business Days prior
to such Final Scheduled Payment Date or other final Payment Date and shall
specify that payment of the principal amount and any interest due with respect
to such Note at the Final Scheduled Payment Date or other final Payment Date
will be payable only upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for such
final payment.
Section 3.06 PROTECTION OF TRUST ESTATE. (a) As and when requested by
the Indenture Trustee, the Issuer will from time to time execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture; or
(iii) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as described in the Opinion of Counsel delivered at the Closing Date
pursuant to Section 3.07(a), if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b)) unless the Indenture Trustee shall have first
received an Opinion of Counsel to the effect that the lien and security interest
created by this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.06.
Section 3.07 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the lien and security interest in the Loans
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and reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) On or before December 31st in each calendar year, beginning in
____, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at
the expense of the Issuer either stating that, in the opinion of such counsel,
such action has been taken with respect to the recording, filing, re-recording
and refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and security interest in the Loans and reciting the details of such action
or stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest in the Loans until December 31 in the following calendar year.
Section 3.08 PERFORMANCE OF OBLIGATIONS; SERVICING AGREEMENT. (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Loans or
under any instrument included in the Trust Estate, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the documents relating to the Loans or
any such instrument, except such actions as the Servicer is expressly permitted
to take in the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09 NEGATIVE COVENANTS. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of the Trust Estate, unless
directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate;
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(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or
the proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust
Estate; or
(iv) waive or impair, or fail to assert rights under, the Loan
Purchase Agreement or in any Basic Document, if any such action would
materially and adversely affect the interests of the Noteholders.
Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year ____), an Officer's Certificate
stating, as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture and the Owner Trust
Agreement has been made under such Authorized Officer's supervision;
and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture and the provisions of the Owner Trust
Agreement throughout such year, or, if there has been a default in its
compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof.
Section 3.11 REPRESENTATIONS AND WARRANTIES CONCERNING THE LOANS. The
Indenture Trustee, as pledgee of the Loans, has the benefit of the
representations and warranties made by the Seller in Section 2 and Exhibit B of
the Loan Purchase Agreement concerning the Loans and the right to enforce the
remedies against the Seller provided in such Section 3.1(a) or Section 3.1(b) to
the same extent as though such representations and warranties were made directly
to the Indenture Trustee.
Section 3.12 ASSIGNEE OF RECORD OF THE LOANS. The Issuer hereby directs
and authorizes the Indenture Trustee to hold record title to the Loans by being
named as payee in the endorsements of the Mortgage Notes and assignee in the
Assignments of Mortgage to be recorded. Except as expressly provided in the Loan
Purchase Agreement or in the Servicing Agreement with respect to any specific
Loan, the Indenture Trustee shall not execute any endorsement or assignment or
otherwise release or transfer such record title to any of the Loans until such
time as the remaining Trust may be released pursuant to Section 8.05(b). The
Indenture Trustee's holding of such record title shall in all respects be
subject to its fiduciary obligations to the Noteholders hereunder.
Section 3.13 INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or under the "control" of an "investment company" as such
terms are defined in the
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Investment Company Act of 1940, as amended (or any successor or amendatory
statute), and the rules and regulations thereunder (taking into account not only
the general definition of the term "investment company" but also any available
exceptions to such general definition); provided, however, that the Issuer shall
be in compliance with this Section 3.12 if it shall have obtained an order
exempting it from regulation as an "investment company" so long as it is in
compliance with the conditions imposed in such order.
Section 3.14 SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Servicer, the Issuer and the Indenture Trustee
hereby acknowledges that the Servicer is acting as agent and bailee of the
Indenture Trustee in holding amounts on deposit in the Custodial Account
pursuant to Section 3.02 of the Servicing Agreement that are allocable to the
Loans, as well as its agent and bailee in holding any Related Documents released
to the Servicer pursuant to Section 3.06(c) of the Servicing Agreement, and any
other items constituting a part of the Trust Estate which from time to time come
into the possession of the Servicer. It is intended that, by the Servicer's
acceptance of such agency pursuant to Section 3.02 of the Servicing Agreement,
the Indenture Trustee, as a pledgee of the Loans, will be deemed to have
possession of such Related Documents, such monies and such other items for
purposes of Section 9-305 of the Uniform Commercial Code of the state in which
such property is held by the Servicer.
Section 3.15 ISSUER MAY CONSOLIDATE, ETC. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and to
the Certificate Paying Agent, on behalf of the Certificateholders and
the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of any of the Notes to be
reduced, suspended or withdrawn or to be considered by either Rating
Agency to be below investment grade;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
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(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(c) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person (unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any state, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the Notes, (D) unless
otherwise provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture
and the Notes and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any
other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer that
such transaction shall not cause the rating of the Notes or the
Certificates to be reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
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Section 3.16 SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.13(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.13(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.17 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Loans and the issuance of the Notes and Certificates in the manner contemplated
by this Indenture and the Basic Documents and all activities incidental thereto.
Section 3.18 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.19 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
Section 3.20 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.21 OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED
DOCUMENTS. The recitals contained herein shall be taken as the statements of the
Depositor, and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee makes no representations as to the validity or
sufficiency of this Indenture, of any Basic Document or of the Certificate
(other than the signatures of the Owner Trustee on the Certificate) or the
Notes, or of any Related Documents. The Owner Trustee shall at no time have any
responsibility or liability with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under the Owner Trust Agreement or the Noteholders under this
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
Section 3.22 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,
14
securities or a combination thereof, to the Owner Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or
equity interest or security in or of the Issuer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or security
or (iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Owner Trustee and the Certificateholders as contemplated
by, and to the extent funds are available for such purpose under the Owner Trust
Agreement and (y) payments to the Servicer pursuant to the terms of the
Servicing Agreement. The Issuer will not, directly or indirectly, make payments
to or distributions from the Custodial Account except in accordance with this
Indenture and the Basic Documents.
Section 3.23 NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and under the Owner Trust Agreement.
Section 3.24 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
Section 3.25 STATEMENTS TO NOTEHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall forward by mail or
facsimile to each Noteholder and Certificateholder, respectively, the Statement
delivered to it, on the Business Day following the related Determination Date
pursuant to Section 4.01 of the Servicing Agreement.
Section 3.26 ALLOCATION OF REALIZED LOSSES. On any Payment Date in
which the Overcollateralized Amount has been reduced to zero, and an Applied
Loss Amount exists, such Applied Loss Amount shall be allocated in the following
priority:
(a) first, the Class Principal Balance of the Class B-2 Notes shall be
reduced, until the Class Principal Balance thereof has been reduced to zero;
(b) second, the Class Principal Balance of the Class B-1 Notes shall be
reduced, until the Class Principal Balance thereof has been reduced to zero;
(c) third, the Class Principal Balance of the Class M-2 Notes shall be
reduced, until the Class Principal Balance thereof has been reduced to zero; and
(d) fourth, the Class Principal Balance of the Class M-1 Notes shall be
reduced, until the Class Principal Balance thereof has been reduced to zero.
The Class Principal Balance of the Class A Notes will not be so reduced and will
continue to receive Current Interest thereon in accordance with Section 3.05(b).
Section 3.27 DETERMINATION OF THE LIBOR RATE. On each LIBOR Rate
Adjustment Date, LIBOR shall be established by the Indenture Trustee and as to
any Accrual Period, LIBOR will equal the rate for United States dollar deposits
for one month which appears on the Dow Xxxxx Telerate Screen Page 3750 as of
11:00 A M , London time, on that LIBOR rate adjustment date. Dow Xxxxx
15
Telerate Screen Page 3750 means the display designated as page 3750 on the
Telerate Service or any other page as may replace page 3750 on that service for
the purpose of displaying London interbank offered rates of major banks. If the
rate does not appear on that page or any other page as may replace that page on
that service, or if the service is no longer offered, any other service for
displaying LIBOR or comparable rates as may be selected by the Indenture Trustee
after consultation with the Servicer, the rate will be the reference bank rate.
The Reference Bank Rate will be determined on the basis of the rates at
which deposits in the 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 Indenture Trustee after consultation with the
Servicer. The Reference Bank Rate will be determined as of 11:00 A M , London
time, on the LIBOR rate adjustment date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the Class
Principal Balance of the Class A Notes. The Indenture Trustee will request the
principal London office of each of the reference banks to provide a quotation of
its rate. If at least two quotations are provided, the rate will be the
arithmetic mean of the quotations. If on that date fewer than two quotations are
provided as requested, the rate will be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Indenture Trustee
after consultation with the Servicer, as of 11:00 A M , New York City time, on
that 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 of the Class A Notes.
If no quotations can be obtained, the rate will be LIBOR for the prior Payment
Date; provided however, if, under the priorities listed previously in this
paragraph, LIBOR for a Payment Date would be based on LIBOR for the previous
Payment Date for the third consecutive Payment Date, the Indenture Trustee after
consultation with the Servicer shall select an alternative comparable index over
which the Indenture Trustee has no control, used for determining one-month
Eurodollar lending rates that is calculated and published or otherwise made
available by an independent party. LIBOR business day means any day other than
(a) a Saturday or a Sunday or (b) a day on which banking institutions in the
city of London, England or New York, New York are required or authorized by law
to be closed.
The establishment of LIBOR by the Indenture Trustee and the Indenture
Trustee's subsequent calculation of the Note Interest Rate applicable to the
Class A, Class M-2 and Class B-1 Notes for the relevant Accrual Period, in the
absence of manifest error, will be final and binding.
Section 3.28 LIQUIDATION ON FINAL MATURITY DATE. On the Final Maturity
Date, if the Securities are not paid in full on or prior to the Final Maturity
Date, the Indenture Trustee shall take full account of the assets and
liabilities of the Owner Trust, shall liquidate the assets, in a commercially
reasonable manner and on commercially reasonable terms, as promptly as is
consistent with obtaining the fair value thereof and in accordance with Section
5.15, and shall apply and distribute the proceeds therefrom in the order of
priority described in Section 3.05(b), (c), (d), (e), (f) and (g).
Section 3.29 NO RECOURSE. Upon the occurrence of an Event of Default
under the Notes, this Indenture or the other Basic Documents, Holders of the
Notes shall have recourse only to the Collateral and all proceeds thereof, as
and to the extent provided herein, and no recourse shall be had by such Holders
against the Issuer or its other assets or properties.
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ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 THE NOTES. The Book-Entry Notes shall be registered in the
name of a nominee designated by the Depository. Beneficial Owners will hold
interests in the Book-Entry Notes through the book-entry facilities of the
Depository in minimum initial Note Balances of $25,000 and integral multiples of
$1 in excess thereof. Ownership in any Physical Note will be evidenced by a
physical, fully registered Note transferable through the facilities of the Note
Registrar.
The Indenture Trustee may for all purposes (including the making of
payments due on the Book- Entry Notes) deal with the Depository as the
authorized representative of the Beneficial Owners with respect to the
Book-Entry Notes for the purposes of exercising the rights of Holders of
Book-Entry Notes hereunder. Except as provided in the next succeeding paragraph
of this Section 4.01, the rights of Beneficial Owners with respect to the
Book-Entry Notes shall be limited to those established by law and agreements
between such Beneficial Owners and the Depository and Depository Participants.
Except as provided in Section 4.08, Beneficial Owners shall not be entitled to
definitive certificates for the Book-Entry Notes as to which they are the
Beneficial Owners. Requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Notes shall not be deemed inconsistent if they are made
with respect to different Beneficial Owners. The Indenture Trustee may establish
a reasonable record date in connection with solicitations of consents from or
voting by Holders of the Book-Entry Notes and give notice to the Depository of
such record date. Without the consent of the Issuer and the Indenture Trustee,
no Book-Entry Note may be transferred by the Depository except to a successor
Depository that agrees to hold such Book-Entry Note for the account of the
Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Book-Entry
Notes it beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF NOTES; APPOINTMENT OF CERTIFICATE REGISTRAR. The Issuer shall cause to be
kept at the Indenture Trustee's Corporate Trust Office a Note Register in which,
subject to such reasonable regulations as it may prescribe, the Note Registrar
shall provide for the registration of Notes and of transfers and exchanges of
Notes as herein provided.
Each Person who has or who acquires any Note (other than a Class B-2
Note) shall be deemed by the acceptance or acquisition of such Note to have
represented that the either (1) it is not
17
acquiring the Note with the assets of a Plan or (2) the acquisition and holding
of a Note will not give rise to a nonexempt prohibited transaction under Section
406 of ERISA or Section 4975 of the Code as a result of any of the
above-mentioned Persons being a "Party in Interest" (within the meaning of
ERISA) or Disqualified Person (within the meaning of the Code).
No Class B-2 Note may be sold or transferred unless: (1) the transferee
is not a Plan or any other person acting on behalf of a Plan, or using the
assets of a Plan to acquire such Notes; or (2) the transferee is a Plan and has
provided the Issuer and the Indenture Trustee an Opinion of Counsel satisfactory
to the Issuer and the Indenture Trustee that the purchase, holding and transfer
of the Class B-2 Notes or interests therein is permissible under applicable law,
will not constitute or result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Issuer, the Owner
Trustee or the Indenture Trustee to any obligation in addition to those
undertaken in this Agreement.
The Class B-2 Notes cannot be sold or transferred to Non-United States
Persons.
No transfer, sale, pledge or other disposition of a Class B-2 Note
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act and any applicable
state securities laws or is made in accordance with said Act and laws. In the
event of any such transfer, the Indenture Trustee prior to such transfer either
(i) shall require the transferee to execute an investment letter in
substantially the form attached hereto as Exhibit C (or in such form and
substance reasonably satisfactory to the Indenture Trustee) which investment
letters shall not be an expense of the Trust, the Indenture Trustee, the
Servicer or the Depositor and which investment letter states that, among other
things, such transferee (a) is a "qualified institutional buyer" as defined
under Rule 144A, acting for its own account or the accounts of other "qualified
institutional buyers" as defined under Rule 144A, and (b) is aware that the
proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act of 1933, as amended, provided by Rule 144A
or (ii) (a) may require the delivery of a written Opinion of Counsel acceptable
to and in form and substance satisfactory to the Indenture Trustee that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trust, the Indenture Trustee, the Servicer or the Depositor and (b) shall
require the transferee to execute a representation letter, substantially in the
form of Exhibit D hereto, and the transferor to execute a representation letter,
substantially in the form of Exhibit E hereto, each acceptable to and in form
and substance satisfactory to the Indenture Trustee certifying the facts
surrounding such transfer, which representation letters shall not be an expense
of the Trust, the Indenture Trustee, the Servicer or the Depositor.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Class of Note at the Corporate
Trust Office, the Issuer shall execute and the Note Registrar shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Notes of the same Class in authorized initial Note Balances evidencing
the same aggregate Percentage Interests.
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Subject to the foregoing, at the option of the Noteholders, Notes may
be exchanged for other Notes of the same Class and of like tenor, in authorized
initial Note Balances evidencing the same aggregate Percentage Interests upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the Note
Registrar. Whenever any Notes are so surrendered for exchange, the Indenture
Trustee shall execute and the Note Registrar shall authenticate and deliver the
Notes which the Noteholder making the exchange is entitled to receive. Each Note
presented or surrendered for registration of transfer or exchange shall (if so
required by the Note Registrar) be duly endorsed by, or be accompanied by a
written instrument of transfer in form reasonably satisfactory to the Note
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing with such signature guaranteed by a commercial bank or trust company
located or having a correspondent located in the city of New York. Notes
delivered upon any such transfer or exchange will evidence the same obligations,
and will be entitled to the same rights and privileges, as the Notes
surrendered.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall
be canceled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Owner Trust Agreement in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges
thereof pursuant to Section 3.05 of the Owner Trust Agreement. The Indenture
Trustee hereby accepts such appointment.
Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, instead
of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to
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recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05 CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; provided however, that such
Issuer Request is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
Section 4.06 BOOK-ENTRY NOTES. The Notes (other than the Class B-2
Notes), upon original issuance, will be issued in the form of typewritten Notes
representing the Book-Entry Notes, to be delivered to The Depository Trust
Company, the initial Depository, by, or on behalf of, the Issuer. The Notes
shall initially be registered on the Note Register in the name of Cede & Co.,
the nominee of the initial Depository, and no Beneficial Owner will receive a
Definitive Note representing such Beneficial Owner's interest in such Note,
except as provided in Section 4.08. Unless and until
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definitive, fully registered Notes (the "Definitive Notes") have been issued to
Beneficial Owners pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and
the giving of instructions or directions hereunder) as the sole holder
of the Notes, and shall have no obligation to the Owners of the Notes;
(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of
this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Depository and shall be limited to those established by law
and agreements between such Owners of Notes and the Depository and/or
the Depository Participants. Unless and until Definitive Notes are
issued pursuant to Section 4.08, the initial Depository will make
book-entry transfers among the Depository Participants and receive and
transmit payments of principal of and interest on the Notes to such
Depository Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Note Balances of the Notes,
the Depository shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Beneficial
Owners and/or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in
the Notes and has delivered such instructions to the Indenture Trustee.
Section 4.07 NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Holders of the Notes is required under this Indenture,
unless and until Definitive Notes shall have been issued to Beneficial Owners
pursuant to Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08 DEFINITIVE NOTES. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Owners of the Notes representing beneficial interests
aggregating at least a majority of the Note Balances of the Notes advise the
Depository in writing that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Beneficial Owners, then the
Depository shall notify all Beneficial Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same. Upon surrender to the Indenture Trustee
of the typewritten Notes representing the Book-Entry Notes by the Depository,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the
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Depository. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
Section 4.09 TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer and agree, so long as the equity of the
Issuer is owned by one person for federal income tax purposes, to disregard the
Issuer as an entity separate from its 100% owner. However, in the event the
Issuer is treated as a partnership, then the Administrator pursuant to the
Administration Agreement shall, for federal income tax information and reporting
purposes, treat the Issuer as a partnership and will file such tax returns
relating to a partnership (including the partnership information return on IRS
Form 1065). All of the parties hereto and each Noteholder agrees to appoint the
Administrator as agent to the "tax matters person" for federal income tax
purposes, if necessary.
Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.13, 3.15, 3.16 and the last paragraph of Section 4.02, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.11) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when
(A) either
(1) each Class of Notes theretofore authenticated and
delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been replaced
or paid as provided in Section 4.03 and (ii) Notes
for whose payment money has theretofore been
deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section
3.03) have been delivered to the Indenture Trustee
for cancellation; or
(2) each Class of Notes not theretofore delivered to
the Indenture Trustee for cancellation
a. have become due and payable,
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b. will become due and payable within
one year, or
c. have been declared immediately due
and payable pursuant to Section
5.02.
and the Issuer, in the case of a. or b. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire indebtedness on such Notes
then outstanding not theretofore delivered to the Indenture Trustee for
cancellation when due on the Final Scheduled Payment Date;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 10.01, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with and, if the
Opinion of Counsel relates to a deposit made in connection with Section
4.10(A)(2)b. above, such opinion shall further be to the effect that
such deposit will not have any material adverse tax consequences to the
Issuer, any Noteholders or any Certificateholders.
Section 4.11 APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.12 [RESERVED]
Section 4.13 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.14 TEMPORARY NOTES. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
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If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
ARTICLE V
Default and Remedies
Section 5.01 EVENTS OF DEFAULT. The Issuer shall deliver to the
Indenture Trustee, within five days after learning of the occurrence any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) of the definition of "Event of Default" written
notice in the form of an Officer's Certificate of its status and what action the
Issuer is taking or proposes to take with respect thereto.
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee may, and upon the request of the Holders of Notes representing
not less than a majority of the Note Balances of all Notes, the Indenture
Trustee shall, declare the Notes to be immediately due and payable, by a notice
in writing to the Issuer (and to the Indenture Trustee if given by Noteholders),
and upon any such declaration the unpaid principal amount of each class of
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the Note Balances of all Notes, by written notice to the Issuer and
the Indenture Trustee may in writing waive the related Event of Default and
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on the
Notes and all other amounts that would then be due hereunder
or upon the Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid by the Indenture Trustee hereunder
and the reasonable compensation, expenses and disbursements of
the Indenture Trustee and its agents and counsel; and
24
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) Subject to Section 3.27, the Issuer covenants that if a default
occurs in the payment of (i) any interest on any Note when the same becomes due
and payable, and such default continues for a period of five days, or (ii) the
principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
pay to it, for the benefit of the Holders of Notes, the whole amount then due
and payable on the Notes for principal and interest, with interest upon the
overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses and disbursements of the Indenture Trustee and
its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee subject to the provisions of Section 10.17 hereof may, as more
particularly provided in Section 5.04, in its discretion, proceed to protect and
enforce its rights and the rights of the Noteholders, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
25
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, willful misconduct or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence, willful misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
26
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 5.04 REMEDIES; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee subject to the provisions
of Section 10.17 hereof may do one or more of the following (subject to Section
5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged
due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee and the Holders of the Notes;
(iv) [Reserved]
(v) refrain from selling the Trust Estate (unless otherwise
directed by a majority of noteholders) and continue to apply all
amounts received thereon to payments on the Notes in accordance with
Section 3.05; and
(vi) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law.
provided, however, that the Indenture Trustee must sell or otherwise liquidate
the Trust Estate following an Event of Default, if (i) the Holders of the Notes
representing not less than a majority of the Note Balance of all of the Notes
direct the Indenture Trustee to sell or otherwise liquidate the Trust Estate or
(ii) the Indenture Trustee determines that the Loans will not continue to
provide sufficient funds for (A) the payment of expenses under this Indenture
and (B) the payment of principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable. In determining
such sufficiency or insufficiency with respect to clause (A) and (B), the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose. Notwithstanding the foregoing, so long as a Servicing
Default has not occurred, any Sale of the Trust Estate shall be made subject to
the continued servicing of the Loans by the Servicer as provided in the
Servicing Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
27
FIRST: to the Indenture Trustee for amounts due and unpaid
under Section 6.07 and to the Owner Trustee for amounts due
and unpaid under Article VII of the Amended and Restated Trust
Agreement;
SECOND: to the Class A Noteholders, the amount of any Current
Interest and any Carryforward Interest, any applicable Basis
Risk Shortfall, and further as principal until the Class
Principal Balance of such Class has been reduced to zero;
THIRD: to the Class M-1 Noteholders, the amount of any Current
Interest and any Carryforward Interest, any applicable
Deferred Amounts, and further as principal until the Class
Principal Balance of such Class has been reduced to zero;
FOURTH: to the Class M-2 Noteholders, the amount of any
Current Interest and any Carryforward Interest, any applicable
Deferred Amounts, any applicable Basis Risk Shortfall, and
further as principal until the Class Principal Balance of such
Class has been reduced to zero;
FIFTH: to the Class B-1 Noteholders, the amount of any Current
Interest and any Carryforward Interest, any applicable
Deferred Amounts, any applicable Basis Risk Shortfall, and
further as principal until the Class Principal Balance of such
Class has been reduced to zero;
SIXTH: to the Class B-2 Noteholders, the amount of any Current
Interest and any Carryforward Interest, any applicable
Deferred Amounts, any applicable Available Funds Shortfall,
and further as principal until the Class Principal Balance of
such Class has been reduced to zero; and
SEVENTH: to the payment of the remainder, if any to the
Certificate Paying Agent on behalf of the Issuer or to any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee shall, unless otherwise directed to by a
majority of noteholders, elect to take and maintain possession of the Trust
Estate. It is the desire of the parties hereto and the Noteholders that there be
at all times sufficient funds for the payment of principal of and interest on
the Notes and other obligations of the Issuer.
Section 5.06 LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:
28
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Note Balances of
the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the Note Balances of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Note Balances of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, but
subject to Section 3.27, the Holder of any Note shall have the right, which is
absolute and unconditional, to receive payment of the principal of, and
interest, on such Note on or after the respective due dates thereof expressed in
such Note or in this Indenture and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such
Holder.
Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
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Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11 CONTROL BY NOTEHOLDERS. The Holders of a majority of the
Note Balances of Notes shall have the right to direct the time, method and place
of conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power conferred on the
Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any
direction to the Indenture Trustee to sell or liquidate the Trust
Estate shall be by Holders of Notes representing not less than a
majority of the Note Balances of Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee is directed to retain the Trust
Estate pursuant to such Section, then any direction to the Indenture
Trustee by Holders of Notes representing less than a majority of the
Note Balances of Notes to sell or liquidate the Trust Estate shall be
of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.
Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Note Balances of the Notes
may waive any past Event of Default and its consequences except an Event of
Default (a) with respect to payment of principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the case
of any such waiver, the Issuer, the Indenture Trustee and the Holders of the
Notes shall be restored to their former positions and rights hereunder,
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respectively; but no such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Xxxxxx's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the Note
Balances of the Notes or (c) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or after
the respective due dates expressed in such Note and in this Indenture.
Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 5.15 SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 is expressly subject to the provisions of Section 5.05 and this
Section 5.15. The power to effect any such Sale shall not be exhausted by any
one or more Sales as to any portion of the Trust Estate remaining unsold, but
shall continue unimpaired until the entire Trust Estate shall have been sold or
all amounts payable on the Notes and under this Indenture shall have been paid.
The Indenture Trustee may from time to time postpone any public Sale by public
announcement made at the time and place of such Sale. The Indenture Trustee
hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless:
(1) the Holders of all Notes consent to or direct the
Indenture Trustee to make, such Sale, or
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(2) the proceeds of such Sale would be not less than
the entire amount which would be payable to the
Noteholders under the Notes and the
Certificateholders under the Certificates, in full
payment thereof in accordance with Section 5.02, 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 other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders have otherwise consented or directed the
Indenture Trustee, at any public Sale of all or any portion of the Trust Estate
at which a minimum bid equal to or greater than the amount described in
paragraph (2) of subsection (b) of this Section 5.15 has not been established by
the Indenture Trustee and no Person bids an amount equal to or greater than such
amount.
(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 Notes or claims
for interest thereon in lieu of cash up to the amount
which shall, upon distribution of the net proceeds of
such sale, be payable thereon, and such Notes, in
case the amounts so payable thereon shall be less
than the amount due thereon, shall be returned to the
Holders thereof after being appropriately stamped to
show such partial payment;
(2) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any Sale
thereof, and, subject to any requirements of, and to
the extent permitted by, applicable law in connection
therewith, may purchase all or any portion of the
Trust Estate in a private sale, and, in lieu of
paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price
against the sum of (A) the amount which would be
distributable to the Holders of the Notes and Holders
of Certificates as a result of such Sale in
accordance with Section 5.04(b) on the Payment Date
next succeeding the date of such Sale and (B) the
expenses of the Sale and of any Proceedings in
connection therewith which are reimbursable to it,
without being required to produce the Notes in order
to complete any such Sale or in order for the net
Sale price to be credited against such Notes, and any
property so acquired by the Indenture Trustee shall
be held and dealt with by it in accordance with the
provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver
an appropriate instrument of conveyance transferring
its interest in any portion of the Trust Estate in
connection with a Sale thereof;
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(4) the Indenture Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the
Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect
such Sale; and
(5) no purchaser or transferee at such a Sale shall
be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any
conditions precedent or see to the application of any
monies.
Section 5.16 ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
ARTICLE VI
The Indenture Trustee
Section 6.01 DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
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(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11 which it is
entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Owner Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
Section 6.02 RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the
34
Issuer or its Affiliates with the same rights it would have if it were not
Indenture Trustee. Any Note Registrar, coregistrar or co-paying agent may do the
same with like rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be (i) responsible for and makes no representation as to the validity
or adequacy of this Indenture or the Notes, (ii) accountable for the Issuer's
use of the proceeds from the Notes or (iii) responsible for any statement of the
Issuer or any other Person in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
Section 6.05 NOTICE OF EVENT OF DEFAULT. The Indenture Trustee shall
mail to each Noteholder notice of the Event of Default within 90 days after it
occurs. Except in the case of an Event of Default in payment of principal of or
interest on any Note, the Indenture Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
Section 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns including
without limitation Form 1099, to the extent such form is required by law. In
addition, upon the Issuer's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The Indenture Trustee shall be compensated and indemnified by the Seller in
accordance with Section 4(b) of the Administration Agreement, and all amounts
owing to the Indenture Trustee hereunder in excess of such amount shall be paid
solely as provided in Section 3.05 hereof (subject to the priorities set forth
therein). The Indenture Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuer shall reimburse the
Indenture Trustee for all Trustee Additional Expenses, in addition to the
compensation for its services. The Issuer shall indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the reasonable fees
and expenses of such counsel. The Issuer is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
with respect to the Issuer, the expenses are intended to constitute
35
expenses of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. No termination of the
Indenture Trustee without cause will be effective unless the costs and expenses
of such Indenture Trustee have been reimbursed in connection with such removal.
The Indenture Trustee may resign at any time by so notifying the Issuer. The
Holders of a majority of Note Balances of the Notes may remove the Indenture
Trustee by so notifying the Indenture Trustee and may appoint a successor
Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee. In addition, the
Indenture Trustee will resign to avoid being directly or indirectly controlled
by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of Note Balances of
the Notes may petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
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Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies written notice of any such transaction after the Closing Date.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Owner Trust, and to vest
in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or desirable.
No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any cotrustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
37
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of A2 or better by Xxxxx'x. The Indenture
Trustee shall comply with TIA ss. 310(b), including the optional provision
permitted by the second sentence of TIA ss. 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13 REPRESENTATIONS AND WARRANTIES. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized, validly existing
and in good standing under the laws of the State of New York with power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted.
(ii) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this
38
Indenture have been duly authorized by the Indenture Trustee by all
necessary corporate action.
(iii) The consummation of the transactions contemplated by
this Indenture and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of organization or bylaws of the Indenture Trustee or any
agreement or other instrument to which the Indenture Trustee is a party
or by which it is bound which conflict or breach would have a
materially adverse impact on the ability of the Indenture Trustee to
perform its obligations under the Basic Documents to which it is a
party.
(iv) To the Indenture Trustee's best knowledge, there are no
proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Indenture or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture
Trustee of its obligations under, or the validity or enforceability of,
this Indenture.
(v) The Indenture Trustee does not have notice of any adverse
claim (as such terms are used in Delaware UCC Section 8-302) with
respect to the Loans.
Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Loans and hold the assets of the Trust
in trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.15 INDENTURE TRUSTEE MAY OWN SECURITIES. The Indenture
Trustee, in its individual or any other capacity may become the owner or pledgee
of Securities with the same rights it would have if it were not Indenture
Trustee.
Section 6.16 COMPLIANCE WITH WITHHOLDING REQUIREMENTS. Notwithstanding
any other provision of this Indenture, the Indenture Trustee shall comply with
all federal withholding requirements respecting payments to Noteholders of
interest that the Indenture Trustee reasonably believes are applicable under the
Code. The consent of Noteholders shall not be required for such withholding.
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ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date and, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03 REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee, and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss.
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
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(d) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04 REPORTS BY INDENTURE TRUSTEE. If required by TIA ss.
313(a), within 60 days after each January 1 beginning with January 1, ____, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02 TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Indenture Trustee shall establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Certificate Paying Agent, on
behalf of the Certificateholders, the Payment Account as provided in Section
3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the Certificateholders.
(c) Any institution maintaining the Payment Account shall at the
direction of the Indenture Trustee invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Indenture, if a Person other than the
Indenture Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Indenture Trustee is the obligor thereon and shall not be sold
or disposed of prior to its maturity. All income and gain realized from any such
investment as well as any interest earned on deposits in the Payment Account
shall be for the benefit of the Indenture Trustee. The Indenture shall deposit
in the Payment Account
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an amount equal to the amount of any loss incurred in respect of any such
investment immediately upon realization of such loss without right of
reimbursement.
(d) On each Payment Date, the Indenture Trustee shall distribute all
amounts on deposit in the Payment Account to Noteholders in respect of the Notes
and in its capacity as Certificate Paying Agent to Certificateholders in the
order of priority set forth in Section 3.05 (except as otherwise provided in
Section 5.04(b)).
Section 8.03 OFFICER'S CERTIFICATE. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
Section 8.04 TERMINATION UPON PAYMENT TO NOTEHOLDERS. This Indenture
and the respective obligations and responsibilities of the Issuer and the
Indenture Trustee created hereby shall terminate upon the payment to the
Noteholders, the Certificate Paying Agent (on behalf of the Certificateholders)
and the Indenture Trustee of all amounts required to be distributed pursuant to
Article III.
Section 8.05 RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate.
Section 8.06 SURRENDER OF NOTES UPON FINAL PAYMENT. By acceptance of
any Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
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ARTICLE IX
Supplemental Indentures
Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not materially and
adversely affect the interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(viii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
provided, however, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an opinion of counsel of the
Issuer that entering into such indenture
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supplement will not (A) have any material adverse tax consequences to the
Noteholders and (B) adversely affect in any material respect the interests of
the Certificateholder.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, 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.
(c) The Issuer and the Indenture Trustee shall, as directed by the
Holders of Certificates which represent not less than 100% of the Certificate
Percentage Interests thereof, enter into an indenture or indentures supplemental
hereto for the purpose of providing for the issuance of one or more additional
Classes of Notes entitled to payments derived solely from all or a portion of
the payments to which the Certificate issued on the Closing Date pursuant to the
Owner Trust Agreement are entitled; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, (i) adversely affect in any material
respect the interests of any Noteholder or (ii) cause the Issuer to be subject
to an entity level tax. Each such Class of Notes shall be a non-recourse
obligation of the Issuer and shall be entitled to interest and principal in such
amounts, and to such security for the repayment thereof, as shall be specified
in such amendment or amendments. Promptly after the execution by the Issuer and
the Indenture Trustee of any amendments pursuant to this Section or the creation
of a new Indenture and the issuance of the related Class or Classes of Notes,
the Issuer shall require the Indenture Trustee to give notice to the Holders of
the Notes and the Rating Agencies setting forth in general terms the substance
of the provisions of such amendment. Any failure of the Indenture Trustee to
provide such notice as is required under this paragraph, or any defect therein,
shall not, however, in any way impair or affect the validity of such amendment
or any Class of Notes issued pursuant thereto.
Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the Note Balances of the Notes affected
thereby, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided however, that
no such supplemental indenture shall, without the consent of the Holder of each
Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or
the interest rate thereon, change the provisions of this Indenture
relating to the application of collections on, or the proceeds of the
sale of, the Trust Estate to payment of principal of or interest on the
Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon
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is payable, or impair the right to institute suit for the enforcement
of the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any
such amount due on the Notes on or after the respective due dates
thereof;
(ii) reduce the percentage of the Note Balances of the Notes,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception
in the definition of the term "Holder";
(iv) reduce the percentage of the Note Balances of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell
or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents cannot
be modified or waived without the consent of the Holder of each Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation); or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture; and provided, further, that
such action shall not, as evidenced by an Opinion of Counsel, cause the
Issuer to be subject to an entity level tax.
and provided, further, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not adversely affect in any
material respect the interests of the Certificateholder.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders (as defined in
Section 10.03) under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
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Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
Miscellaneous
Section 10.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such
certificate or opinion has read or has caused to be
read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such certificate
or opinion are based;
(3) a statement that, in the opinion of each such
signatory, such signatory has made such examination
or investigation as is necessary to enable such
signatory to express an informed opinion as to
whether or not such covenant or condition has been
complied with;
(4) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been
complied with; and
(5) if the Signer of such Certificate or Opinion is
required to be Independent, the Statement required by
the definition of the term "Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(iii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
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Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Note Balances of the Notes, but
such a certificate need not be furnished with respect to any securities
so deposited, if the fair value thereof to the Issuer as set forth in
the related Officer's Certificate is less than $25,000 or less than one
percent of the Note Balances of the Notes.
(iv) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(v) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property
as contemplated by clause (v) below or securities released from the
lien of this Indenture since the commencement of the then-current
calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the Note
Balances of the Notes, but such certificate need not be furnished in
the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then Note Balances of the
Notes.
(vi) Notwithstanding any provision of this Indenture, the
Issuer may, without compliance with the requirements of the other
provisions of this Section 10.01, (A) collect, sell or otherwise
dispose of the Loans as and to the extent permitted or required by the
Basic Documents or (B) make cash payments out of the Payment Account as
and to the extent permitted or required by the Basic Documents, so long
as the Issuer shall deliver to the Indenture Trustee every six months,
commencing June 30, ____, an Officer's Certificate of the Issuer
stating that all the dispositions of Collateral described in clauses
(A) or (B) above that occurred during the preceding six calendar months
were in the ordinary course of the Issuer's business and that the
proceeds thereof were applied in accordance with the Basic Documents.
Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
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Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Seller or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03 ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done
49
by the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 10.04 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders is to be made upon, given or
furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at the
Corporate Trust Office. The Indenture Trustee shall promptly transmit
any notice received by it from the Noteholders to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed first-class, postage prepaid to the Issuer addressed to: _____
Trust Series ____-__, in care of [Name of Owner Trustee], or at any
other address previously furnished in writing to the Indenture Trustee
by the Issuer. The Issuer shall promptly transmit any notice received
by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
S&P, at the following address: 00 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention
Mortgage Surveillance Monitoring and (ii) in the case of Moody's, at the
following address: Xxxxx'x Investors Service, Inc., ABS Monitoring Department,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Surveillance Group; or as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
Section 10.05 NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
50
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 10.06 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer shall furnish to the Indenture Trustee a copy of each such agreement
and the Indenture Trustee shall cause payments to be made and notices to be
given in accordance with such agreements.
Section 10.07 CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 10.08 EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.09 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 10.10 SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 10.11 BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
Section 10.12 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture)
51
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
Section 10.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.15 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 10.16 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Owner Trust
Agreement.
Section 10.17 NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time prior to the day one year and one day after the
date this Indenture terminates institute against the Depositor or the Issuer, or
join in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
52
Section 10.18 INSPECTION. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
53
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
_____ TRUST SERIES ____-__,
as Issuer
[Name of Owner Trustee], not in its
individual capacity but solely as
Owner Trustee
By:_____________________________________
Name:
Title:
[NAME OF INDENTURE TRUSTEE],
as Indenture Trustee
By:_____________________________________
Name:
Title:
[NAME OF INDENTURE TRUSTEE] xxxxxx
accepts the appointment as Paying
Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to
Section 4.02 hereof.
By:______________________________
Name:
Title:
54
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of ________________, before me personally appeared
____________________ to me known, who being by me duly sworn, did depose and
say, that he is the ______________________ of the Owner Trustee, one of the
corporations described in and which executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation; and that he signed his name thereto by like order.
________________________
Notary Public
NOTARIAL SEAL
55
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of __________________, before me personally appeared
______________________, to me known, who being by me duly sworn, did depose and
say, that she is the _____________________ of [Name of Indenture Trustee], as
Indenture Trustee, one of the corporations described in and which executed the
above instrument; that she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
________________________
Notary Public
NOTARIAL SEAL
56
EXHIBIT A-1
FORM OF CLASS A NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE BASIC DOCUMENTS.
A-1-1
______ TRUST SERIES ____-__
Asset-Backed Note
Class A Principal Amount:$ _____________
Registered
Percentage Interest: ___%
No. ___ Note Interest Rate: ___%
CUSIP NO. ___________
_____ Trust Series ____-__, a statutory trust duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of $ ____________, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal and interest on the Class A Notes pursuant to Section 3.05 of the
Indenture dated as of ______________ (the "Indenture") between the Issuer, as
Issuer, and [Name of Indenture Trustee], as Indenture Trustee (the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the Payment Date in _____________, to the
extent not previously paid on a prior Payment Date. Capitalized terms used but
not defined herein are defined in Appendix A of the Indenture.
Interest on the Class A Notes will be paid monthly on each Payment Date
at the Note Interest Rate subject to limitations which may result in Interest
Shortfalls (as further described in the Indenture). The Note Interest Rate for
the Class A Notes, is a rate per annum equal to the least of (i) LIBOR plus
____%, in the each payment date; (ii) the Net Funds Cap; and (iii) the Maximum
Note Interest Rate. LIBOR for each applicable Interest Accrual Period will be
determined on the second LIBOR Business Day immediately preceding (i) the
Closing Date in the case of the first Interest Period and (ii) the first day of
each succeeding Interest Period by the Indenture Trustee as set forth in the
Indenture. All determinations of LIBOR by the Indenture Trustee shall, in the
absence of manifest error, be conclusive for all purposes, and each holder of
this Note, by accepting this Note, agrees to be bound by such determination.
Interest on this Note will accrue for each Payment Date from and including the
most recent Payment Date on which interest has been paid (in the case of the
first Payment Date, from the Closing Date) to but excluding such Payment Date.
Interest will be computed on the basis of the actual number of days in each
Interest Period and a year assumed to consist of 360 days. Principal of Interest
on this Note shall be paid in the manner specified on the reverse hereof.
Principal of and Interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
A-1-2
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Asset- Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes (the "Notes") are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
Principal of and Interest on this Note will be payable on each Payment
Date, commencing on ________________, as described in the Indenture. "Payment
Date" means the twenty-fifth day of each month, or, if any such date is not a
Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and
payable in full on the Payment Date in ___________ pursuant to the Indenture, to
the extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee or the holders of Notes representing not less than a
majority of the Note Balances of all Notes may declare the Notes to be
immediately due and payable in the manner provided in Section 5.02 of 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 Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of
A-1-3
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the holder hereof or such holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended, and thereupon
one or more new Notes in authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No
service charge will be charged for any registration of transfer or exchange of
this Note, but the Note Registrar shall require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note, or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Servicer, the Depositor or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial Owner of a Note will not prior to the day that is one year and one
day after the date this Indenture terminates, institute against the Issuer or
the Depositor, or join in any institution against the Issuer or the Depositor
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
Each Holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
represents that either (1) it is not acquiring the Note with the assets of a
Plan or (2) the acquisition and holding of a Note will not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code as a result of any of the above-mentioned Persons being a "Party in
Interest" (within the meaning of ERISA) or Disqualified Person (within the
meaning of the Code).
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer.
Each holder of a Note, by acceptance of a Note (and each Beneficial
A-1-4
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered (as of the
day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the holders of the Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the holders of Notes representing a majority of the Note Balances of
all Notes at the time Outstanding and with prior notice to the Rating Agencies.
The Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the Note Balances of all Notes, on behalf
of the holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the holder of this Note (or
any one of more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Issuer and the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of holders
of the Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor or the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair, the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Name of Owner Trustee], in its
individual capacity, [Name of Indenture
A-1-5
Trustee], in its individual capacity, any owner of a beneficial interest in the
Issuer, or any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on this Note or performance of, or omission to perform, any of the
covenants, obligations or indemnifications contained in the Indenture. The
holder of this Note by its acceptance hereof agrees that, except as expressly
provided in the Basic Documents, in the case of an Event of Default under the
Indenture, the holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
A-1-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Note to be duly executed.
_____ Trust Series ____-__
By [NAME OF OWNER TRUSTEE], not
in its individual capacity but
solely as Owner Trustee
Dated: ________________
By__________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within mentioned Indenture.
[NAME OF INDENTURE TRUSTEE], not in
its individual capacity but solely
as Indenture Trustee
Dated: _______________
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 transfer
unto ___________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
___________________________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated:__________ ___________________________________*/
Signature Guaranteed:
___________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-1-8
EXHIBIT A-2
FORM OF CLASS M NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE BASIC DOCUMENTS.
A-2-1
_____ TRUST SERIES ____-__
Asset-Backed Note
Class M-__
Registered Principal Amount: $___________
Percentage Interest: ___%
No. ___ Note Interest Rate: ___%
CUSIP NO. ___________
_______ Trust Series ____-__, a statutory trust duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to __________ or
registered assigns, the principal sum of $___________, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal on the Class M-__ Notes pursuant to Section 3.05 of the Indenture
dated as of _______________ (the "Indenture") between the Issuer, as Issuer, and
[Name of Indenture Trustee], as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in ________________, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.
Interest on the Class M-_ Notes will be paid monthly on each Payment
Date at the Note Interest Rate subject to limitations which may result in
Interest Shortfalls (as further described in the Indenture). The Note Interest
Rate for the Class M-_ Notes will be [___% per annum] [a rate per annum equal to
the least of (i) LIBOR plus ____%, in each payment date(ii) the Net Funds Cap
for that payment date and (iii) the Maximum Note Interest Rate]. Interest will
be computed on the basis of a [30-day month and a 360-day year] [the actual
number of days in each Interest Period and a year assumed to consist of 360
days]. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
Principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Asset- Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
A-2-2
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes (the "Notes") are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each Payment
Date, commencing on _______________, as described in the Indenture. "Payment
Date" means the twenty-fifth day of each month, or, if any such date is not a
Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and
payable in full on the Payment Date in ____________ pursuant to the Indenture,
to the extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee or the holders of Notes representing not less than a
majority of the Note Balances of all Notes may declare the Notes to be
immediately due and payable in the manner provided in Section 5.02 of 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 Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the Corporate Trust
Office, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the holder hereof
or such holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as
A-2-3
amended, and thereupon one or more new Notes in authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the Note Registrar shall require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any registration of transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note, or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Servicer, the Depositor or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial Owner of a Note will not prior to the day that is one year and one
day after the date this Indenture terminates, institute against the Issuer or
the Depositor, or join in any institution against the Issuer or the Depositor
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
Each Holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
represents that either (1) it is not acquiring the Note with the assets of a
Plan or (2) the acquisition and holding of a Note will not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code as a result of any of the above-mentioned Persons being a "Party in
Interest" (within the meaning of ERISA) or Disqualified Person (within the
meaning of the Code).
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer.
Each holder of a Note, by acceptance of a Note (and each Beneficial Owner of a
Note by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered (as of the
day of determination or as of such other date as may be specified in the
A-2-4
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the holders of the Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the holders of Notes representing a majority of the Note Balances of
all Notes at the time Outstanding and with prior notice to the Rating Agencies.
The Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the Note Balances of all Notes, on behalf
of the holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the holder of this Note (or
any one of more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Issuer and the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of holders
of the Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor or the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair, the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Name of Owner Trustee], in its
individual capacity, [Name of Indenture Trustee], in its individual capacity,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder shall have no claim against
any of the foregoing for any deficiency,
A-2-5
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-2-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Note to be duly executed.
_____ Trust Series ____-__
By [NAME OF OWNER TRUSTEE], not
in its individual capacity but
solely as Owner Trustee
Dated: ________________
By__________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within mentioned Indenture.
[NAME OF INDENTURE TRUSTEE], not in
its individual capacity but solely
as Indenture Trustee
Dated: _______________
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 transfer
unto ___________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
___________________________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated:__________ ___________________________________*/
Signature Guaranteed:
___________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-2-8
EXHIBIT A-3
FORM OF CLASS B 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 PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
INDENTURE OR THE BASIC DOCUMENTS.
NO CLASS B-2 NOTE MAY BE SOLD OR TRANSFERRED UNLESS: (1) THE TRANSFEREE
IS NOT A PLAN TRUSTEE OR ANY OTHER PERSON ACTING ON BEHALF OF A PLAN, OR USING
THE ASSETS OF A PLAN TO ACQUIRE SUCH NOTES; OR (2) THE TRANSFEREE IS A PLAN AND
HAS PROVIDED THE ISSUER AND THE INDENTURE TRUSTEE AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER AND THE INDENTURE TRUSTEE THAT THE PURCHASE, HOLDING
AND TRANSFER OF THE CLASS B-2 NOTES OR INTERESTS THEREIN IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN ANY NON-EXEMPT PROHIBITED
TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
ISSUER, THE OWNER TRUSTEE OR THE INDENTURE TRUSTEE TO ANY OBLIGATION IN ADDITION
TO THOSE UNDERTAKEN IN THIS AGREEMENT.
A-3-1
______ TRUST SERIES ____-__
Asset-Backed Note
Class B-__
Registered Principal Amount: $___________
Percentage Interest: ___%
No. ___ Note Interest Rate: ___%
CUSIP NO. ___________
_____ Trust ____-__, a statutory trust duly organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to __________ or registered assigns,
the principal sum of $___________, payable on each Payment Date in an amount
equal to the Percentage Interest specified above of the aggregate amount, if
any, payable from the Payment Account in respect of principal on the Class B-__
Notes pursuant to Section 3.05 of the Indenture dated as of ______________ (the
"Indenture") between the Issuer, as Issuer, and [Name of Indenture Trustee], as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the Payment
Date in ___________, to the extent not previously paid on a prior Payment Date.
Capitalized terms used but not defined herein are defined in Appendix A of the
Indenture.
Interest on the Class B-_ Notes will be paid monthly on each Payment
Date at the Note Interest Rate subject to limitations which may result in [Basis
Risk Shortfalls] [Available Funds Shortfalls] (as further described in the
Indenture). The Note Interest Rate for the Class B-_ Notes [___% per annum] [a
rate per annum equal to the least of (i) LIBOR plus ____%, in each Payment Date;
(ii) the Net Funds Cap for that Payment Date; and (iii) the Maximum Note
Interest Rate]. Interest will be computed on the basis of a [30-day month and a
360-day year] [the actual number of days in each Interest Period and a year
assumed to consist of 360 days]. Principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Asset- Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
A-3-2
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes (the "Notes") are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each Payment
Date, commencing on _____________, as described in the Indenture. "Payment Date"
means the twenty-fifth day of each month, or, if any such date is not a Business
Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and
payable in full on the Payment Date in ___________ pursuant to the Indenture, to
the extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee or the holders of Notes representing not less than a
majority of the Note Balances of all Notes may declare the Notes to be
immediately due and payable in the manner provided in Section 5.02 of 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 Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the Corporate Trust
Office, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee duly executed by, the holder hereof
or such holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in
the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as
A-3-3
amended, and thereupon one or more new Notes in authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the Note Registrar shall require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any registration of transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a Note, or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Servicer, the Depositor or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a Note or,
in the case of a Beneficial Owner of a Note, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such holder
or Beneficial Owner of a Note will not prior to the day that is one year and one
day after the day this Indenture terminates, institute against the Issuer or the
Depositor, or join in any institution against the Issuer or the Depositor of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
[Class B-1] Each Holder or Beneficial Owner of a Note, by acceptance of
a Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, represents that either (1) it is not acquiring the Note with the assets
of a Plan or (2) the acquisition and holding of a Note will not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code as a result of any of the above-mentioned Persons being a "Party in
Interest" (within the meaning of ERISA) or Disqualified Person (within the
meaning of the Code).
[Class B-2] Each Holder or Beneficial Owner of a Note, by acceptance of
a Note it represents that it is not a "Non-US Person".
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer.
Each holder of a Note, by acceptance of a Note (and each Beneficial Owner of a
Note by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
A-3-4
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note is registered (as of the
day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the Indenture Trustee and the rights of the holders of the Notes
under the Indenture at any time by the Issuer and the Indenture Trustee with the
consent of the holders of Notes representing a majority of the Note Balances of
all Notes at the time Outstanding and with prior notice to the Rating Agencies.
The Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the Note Balances of all Notes, on behalf
of the holders of all the Notes, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the holder of this Note (or
any one of more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Issuer and the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of holders
of the Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor or the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair, the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of [Name of Owner Trustee], in its
individual capacity, [Name of Indenture Trustee], in its individual capacity,
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations
A-3-5
or indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
A-3-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Note to be duly executed.
_____ Trust Series ____-__
By [NAME OF OWNER TRUSTEE], not
in its individual capacity but
solely as Owner Trustee
Dated: ________________
By__________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within mentioned Indenture.
[NAME OF INDENTURE TRUSTEE], not in
its individual capacity but solely
as Indenture Trustee
Dated: _______________
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 transfer
unto ___________________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________________________________
___________________________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated:__________ ___________________________________*/
Signature Guaranteed:
___________________________*/
----------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-3-8
EXHIBIT C
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
______ Trust ____-__
Asset-Backed Notes
Series ____-__, Class B-2, No. ___
The undersigned seller, as registered holder (the "Transferor"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the
Transferor and the Indenture Trustee pursuant to Section 5.02 of the Indenture
as follows:
a. The Buyer understands that the Rule 144A Securities have
not been registered under the 1933 Act or the securities laws of any
state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Transferor, the
Indenture Trustee or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule
C-1
144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other
action, that would constitute a distribution of the Rule 144A
Securities under the 1933 Act or that would render the disposition of
the Rule 144A Securities a violation of Section 5 of the 1933 Act or
require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with
respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the 1933 Act and has completed either of
the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. The Buyer is aware that the sale to it is being made in
reliance on Rule 144A. The Buyer is acquiring the Rule 144A Securities
for its own account or the account of other qualified institutional
buyers, understands that such Rule 144A Securities may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for
the account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
1933 Act.
3. The Buyer warrants and represents to, and covenants with, the
Transferor and the Indenture Trustee that either (1) the Buyer is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) has provided
the Indenture Trustee, the Issuer and the Servicer with an opinion of counsel
acceptable to and in form and substance satisfactory to the Indenture Trustee,
the Issuer and the Servicer to the effect that the purchase of the Rule 144A
Securities is permissible under applicable law, will not constitute or result in
any nonexempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Indenture Trustee, the Issuer or the Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Indenture.
The Buyer is a citizen or resident of the United States, a corporation
or a partnership (including an entity treated as a corporation or partnership
for United States federal income tax purposes) created or organized in, or under
the laws of, the United States or any State thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations).
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
C-2
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
_______________________________ ________________________________
Print Name of Transferor Print Name of Buyer
By:____________________________ By:_____________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.____________________________ No._____________________________
Date:__________________________ Date:___________________________
C-3
ANNEX 1 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $______________________** in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ BANK. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statement, a copy of which is attached hereto.
___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements.
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
--------
** Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
C-4
___ INSURANCE COMPANY. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
___ ERISA PLAN. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
___ INVESTMENT ADVISER. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers Act
of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
C-5
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
_______________________________
Print Name of Buyer
By:____________________________
Name:
Title:
Date:__________________________
C-6
ANNEX 2 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) bank deposit notes and certificates of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
C-7
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
_______________________________
Print Name of Buyer
By:____________________________
Name:
Title:
IF AN ADVISER:
_______________________________
Print Name of Buyer
Date:__________________________
C-8
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
_______________, _____
_____ Trust Series ____-__
c/o [Owner Trustee]
[Indenture Trustee]
Attention: _______
Re: _____ Trust Series ____-__
Asset-Backed Notes, Series ____-__, Class B-2
---------------------------------------------
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from (the
"Seller") $ Initial Note Principal Balance of _____ Trust Series ____-__,
Asset-Backed Notes, Series ____-__, Class B-2 (the "Notes"), issued pursuant to
the Indenture (the "Indenture"), dated as of _______________, between [Name of
Indenture Trustee], as indenture trustee (the "Indenture Trustee"), and ______
Trust Series ____-__, as issuer (the "Issuer"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Indenture. The
Purchaser hereby certifies, represents and warrants to, and covenants with, the
Issuer and the Indenture Trustee that:
1. The Purchaser understands that (a) the Notes have not been and will
not be registered or qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Issuer is not required to so
register or qualify the Notes, (c) the Notes may be resold only if registered
and qualified pursuant to the provisions of the Act or any state securities law,
or if an exemption from such registration and qualification is available, (d)
the Indenture contains restrictions regarding the transfer of the Notes and (e)
the Notes will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Notes for its own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any applicable
state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the Notes,
such that it is capable of evaluating the merits and risks of investment in the
Notes, (b) able to bear the economic risks of such an investment and (c) an
"accredited investor" within the meaning of Rule 501(a) promulgated pursuant to
the Act.
4. The Purchaser has been furnished with, and has had an opportunity to
review (a) a copy of the Private Placement Memorandum, dated _________________,
relating to the Notes, (b)
D-1
a copy of the Indenture and (c) such other information concerning the Notes, the
Loans and the Issuer as has been requested by the Purchaser from the Issuer or
the Seller and is relevant to the Purchaser's decision to purchase the Notes.
The Purchaser has had any questions arising from such review answered by the
Issuer or the Seller to the satisfaction of the Purchaser. [If the Purchaser did
not purchase the Notes from the Seller in connection with the initial
distribution of the Notes and was provided with a copy of the Private Placement
Memorandum (the "Memorandum") relating to the original sale (the "Original
Sale") of the Notes by the Issuer, the Purchaser acknowledges that such
Memorandum was provided to it by the Seller, that the Memorandum was prepared by
the Issuer solely for use in connection with the Original Sale and the Issuer
did not participate in or facilitate in any way the purchase of the Notes by the
Purchaser from the Seller, and the Purchaser agrees that it will look solely to
the Seller and not to the Issuer with respect to any damage, liability, claim or
expense arising out of, resulting from or in connection with (a) any error or
omission, or alleged error or omission, contained in the Memorandum, or (b) any
information, development or event arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Note, any interest in any Note or any other similar security to any
person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Note, any interest in any Note or any other
similar security from any person in any manner, (c) otherwise approach or
negotiate with respect to any Note, any interest in any Note or any other
similar security with any person in any manner, (d) make any general
solicitation by means of general advertising or in any other manner or (e) take
any other action, that (as to any of (a) through (e) above) would constitute a
distribution of any Note under the Act, that would render the disposition of any
Note a violation of Section 5 of the Act or any state securities law, or that
would require registration or qualification pursuant thereto. The Purchaser will
not sell or otherwise transfer any of the Notes, except in compliance with the
provisions of the Indenture.
6. The Purchaser
(a) is not an employee benefit or other plan subject to the prohibited
transaction provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Note with "plan assets" of any Plan
within the meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3- 101; or
(b) has provided the Indenture Trustee, the Issuer and the Servicer
with an opinion of counsel acceptable to and in form and substance satisfactory
to the Indenture Trustee, the Issuer and the Servicer to the effect that the
purchase of Notes is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under ERISA or Section 4975 of
the Code and will not subject the Indenture Trustee, the Issuer or the Servicer
to any obligation or liability (including obligations or liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in the Indenture.
D-2
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Issuer, the Indenture Trustee and the Servicer that
the Purchaser will not transfer such Notes to any Plan or person unless either
such Plan or person meets the requirements set forth in either (a) or (b) above.
7. The Purchaser is a citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States or any State thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations).
Very truly yours,
_____________________________
(purchaser)
By:__________________________
Name:
Title:
D-3
EXHIBIT E
FORM OF TRANSFEROR REPRESENTATION LETTER
_______________, _____
_____ Trust Series ____-__
c/o [Owner Trustee]
[Indenture Trustee]
Attention: _______
Re: _____ Trust Series ____-__
Asset-Backed Notes, Series ____-__, Class B-2
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the "Purchaser") of
$________ Initial Note Principal Balance of ______ Trust Series ____-__,
Asset-Backed Notes, Series ____-__, Class B-2 (the "Notes"), issued pursuant to
the Indenture (the "Indenture"), dated as of ______________, between ______
Trust Series ____-__, as issuer (the "Issuer"), and [Name of Indenture Trustee],
as indenture trustee (the "Indenture Trustee"). The Seller hereby certifies,
represents and warrants to, and covenants with, the Issuer and the Indenture
Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Note, any interest in
any Note or any other similar security to any person in any manner, (b) has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Note, any interest in any Note or any other similar security from any
person in any manner, (c) has otherwise approached or negotiated with respect to
any Note, any interest in any Note or any other similar security with any person
in any manner, (d) has made any general solicitation by means of general
advertising or in any other manner, or (e) has taken any other action, that (as
to any of (a) through (e) above) would constitute a distribution of the Notes
under the Securities Act of 1933 (the "Act"), that would render the disposition
of any Note a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act in any manner set forth in the foregoing sentence with respect to
any Note. The Seller has not and will not sell or otherwise transfer any of the
Notes, except in compliance with the provisions of the Indenture.
E-1
Very truly yours,
___________________________________
(Seller)
By:________________________________
Name:
Title:
E-2
APPENDIX A
DEFINITIONS
Accrual Period: For the Class A, Class M-2 and Class B-1 Notes and any
Payment Date, the period commencing on the immediately preceding Payment Date
(or the Closing Date, in the case of the first Accrual Period) and ending on the
day immediately preceding the related Payment Date. For the Class M-1 and Class
B-2 Notes and any Payment Date, the calendar month immediately preceding the
related Payment Date.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
Aggregate Loan Balance: As of any Payment Date will be equal to the
aggregate of the Principal Balances of the Loans as of the last day of the prior
month.
Applied Loss Amount: For any Payment Date, the excess of the aggregate
Class Principal Balance of the Notes over the Aggregate Loan Balance after
giving effect to all Realized Losses incurred with respect to loans during the
Collection Period for such Payment Date and payments of principal on such
Payment Date.
Appraised Value: With respect to any Loan, the value of the related
Mortgaged Property determined at the time of origination of such Loan in
accordance with the Originator's underwriting standards.
Assignment of Mortgage: With respect to any Mortgage, an assignment, notice
of transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction in which the related Mortgaged Property is located to
reflect the sale of the Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same
jurisdiction.
Authorized Officer: With respect to the Issuer, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
Available Funds Cap: For any Payment Date, the Remittance Amount less all
amounts used to pay Current Interest and Carryforward Interest on each Class of
Notes other than the Class B-2 Notes, divided by the Class Principal Balance of
the Class B-2 Notes immediately prior to such Payment Date, and multiplied by
12.
Available Funds Shortfall: For the Class B-2 Notes and any Payment Date,
the sum of:
AA-1
(1) the excess, if any, of (x) the Current Interest calculated at the rate
of _____% per annum over (y) Current Interest calculated at the
Available Funds Cap;
(2) any Available Funds Shortfall remaining unpaid from prior Payment
Dates; and
(3) 30 days interest on the amount in clause (2) calculated at the rate of
____% per annum.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Owner Trust Agreement, the Indenture, the Loan
Purchase Agreement, the Servicing Agreement and the Custodial Agreements and the
other documents and certificates delivered in connection with any of the above.
Basis Risk Shortfall: For the Class A, Class M-2 and Class B-1 Notes, and
any Payment Date, the sum of:
(1) the excess, if any, of the related Current Interest calculated on the
basis of the lesser of (x) one-month LIBOR plus the applicable Note Margin and
(y) the Maximum Interest Rate over the Net Funds Cap for the applicable Payment
Date;
(2) any Basis Risk Shortfall remaining unpaid from prior Payment Dates, and
(3) 30 days interest on the amount in clause (2) calculated on the basis of
the lesser of (x) one-month LIBOR plus the applicable note margin and (y) the
Maximum Interest Rate.
Beneficial Owner: With respect to any Note, the Person who is the
beneficial owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).
Book-Entry Notes: Beneficial interests in the Notes, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture. Initially, the Book-Entry Notes
shall be the Notes (other than the Class B-2 Notes).
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 Delaware are required
or authorized by law to be closed.
Capitalization Workout: As defined in Section 3.02 of the Servicing
Agreement.
Carryforward Interest: For any class of Notes and Payment Date, the sum of
(1) the amount, if any, by which (x) the sum of (A) Current Interest for such
Class for the immediately preceding Payment Date and (B) any unpaid Carryforward
Interest from previous Payment Dates exceeds (y) the amount paid in respect of
interest on such Class on such immediately preceding Payment Date, and (2)
interest on such amount for the related Accrual Period at the applicable Note
Interest Rate.
AA-2
Certificate: The Class CE Certificates issued and outstanding pursuant to
the terms of the Owner Trust Agreement, evidencing a beneficial ownership
interest in the Issuer.
Certificate Distribution Account: The account or accounts created and
maintained by the Certificate Paying Agent pursuant to Section 3.10(c) of the
Owner Trust Agreement. The Certificate Paying Agent will make all distributions
on the Certificate from money on deposit in the Certificate Distribution
Account. The Certificate Distribution Account shall be an Eligible Account.
Certificate Distribution Amount: The amount payable to the Certificate
Paying Agent under Section 3.05(g)(x) of the Indenture for payment to the
Certificate under the Owner Trust Agreement.
Certificate of Trust: The Certificate of Trust filed for the Trust pursuant
to Section 3810(a) of the Statutory Trust Statute, including all amendments and
restatements.
Certificate Paying Agent: The meaning specified in Section 3.10 of the
Owner Trust Agreement.
Certificate Percentage Interest: With respect to the Certificate, the
Certificate Percentage Interest stated on the face thereof.
Certificate Register: The register maintained by the Certificate Registrar
in which the Certificate Registrar shall provide for the registration of the
Certificate and of transfers and exchanges of the Certificate.
Certificate Registrar: Initially, the Indenture Trustee, in its capacity as
Certificate Registrar, or any successor to the Indenture Trustee in such
capacity.
Certificateholder: The Person in whose name a Certificate is registered in
the Certificate Register except that, any Certificate registered in the name of
the Issuer, the Owner Trustee or the Indenture Trustee or any Affiliate of any
of them shall be deemed not to be outstanding and the registered holder will not
be considered a Certificateholder or a holder for purposes of giving any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture or the Owner Trust Agreement provided that, in determining whether the
Indenture Trustee or the Owner Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates that the Indenture Trustee or the Owner Trustee knows to be so
owned shall be so disregarded. Owners of Certificates that have been pledged in
good faith may be regarded as Holders if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee, as the case may be,
the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, any other obligor upon the Certificates or any
Affiliate of any of the foregoing Persons.
Class: Collectively, all of the Notes bearing the same designation.
Class A Notes or Senior Notes: The Class A Notes.
Class B Notes: The Class B-1 or Class B-2 Notes.
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Class B-1 Principal Payment Amount: For any Payment Date on or after the
Stepdown Date, will be the amount, if any, by which (x) the sum of (i) the Class
Principal Balance of the Senior Notes and the aggregate Class Principal Balances
of the Class M-1 and Class M-2 Notes, in each case, after giving effect to
payments on such Payment Date and (ii) the Class Principal Balance of the Class
B-1 Notes immediately prior to such Payment Date exceeds (y) the lesser of (A)
the product of (i) ____% and (ii) the Aggregate Loan Balance for such Payment
Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such Payment Date exceeds (ii) ____% of the Aggregate Loan Balance as of the
Cut-off Date.
Class B-2 Principal Payment Amount: For any Payment Date on or after the
Stepdown Date, will be the amount, if any, by which (x) the sum of (i) the Class
Principal Balance of the Senior Notes and the aggregate Class Principal Balances
of the Class M-1, Class M-2 and Class B-1 Notes, in each case, after giving
effect to payments on such Payment Date and (ii) the Class Principal Balance of
the Class B-2 Notes immediately prior to such Payment Date exceeds (y) the
lesser of (A) the product of (i) _____% and (ii) the Aggregate Loan Balance for
such Payment Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Payment Date exceeds (ii) ____% of the Aggregate Loan Balance
as of the Cut-off Date.
Class M Notes: The Class M-1 and Class M-2 Notes.
Class M-1 Principal Payment Amount: For any Payment Date on or after the
Stepdown Date with respect to such Payment Date, will be the amount, if any, by
which (x) the sum of (i) the Class Principal Balance of the Senior Notes after
giving effect to payments on such Payment Date and (ii) the Class Principal
Balance of the Class M-1 Notes immediately prior to such Payment Date exceeds
(y) the lesser of (A) the product of (i) _____% and (ii) the Aggregate Loan
Balance for such Payment Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Payment Date exceeds (ii) ____% of the Aggregate
Loan Balance as of the Cut-off Date.
Class M-2 Principal Payment Amount: For any Payment Date on or after the
Stepdown Date with respect to such Payment Date, will be the amount, if any, by
which (x) the sum of (i) the Class Principal Balance of the Senior Notes and the
Class Principal Balance of the Class M-1 Notes, in each case, after giving
effect to payments on such Payment Date and (ii) the Class Principal Balance of
the Class M-2 Notes immediately prior to such Payment Date exceeds (y) the
lesser of (A) the product of (i) _____% and (ii) the Aggregate Loan Balance for
such Payment Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Payment Date exceeds (ii) ____% of the Aggregate Loan Balance
as of the Cut-off Date.
Class Principal Balance: For any Class of Notes, as of any Determination
Date, an amount equal to the initial principal balance of that Class, reduced by
the aggregate of the following amounts allocable to that Class: (i) all amounts
previously distributed to holders of Notes of that class as payments of
Principal; and (ii) in the case of any class of Subordinate Notes, any
reductions to the Class Principal Balance thereof due to Realized Losses.
Closing Date: _______________.
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Code: The Internal Revenue Code of 1986 and the rules and regulations
promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the Indenture.
Collection Period: With respect to each Payment Date, the calendar month
preceding the month of that Payment Date.
Combined Loan-to-Value Ratio: With respect to any Loan at origination, the
ratio, expressed as a percentage of (i) the sum of (A) the original principal
balance of such Loan, and (B) any outstanding principal balance at origination
of such Loan, of all other loans, if any, secured by senior liens on the related
Mortgaged Property, to (ii) the Appraised Value.
Corporate Trust Office: With respect to the Indenture Trustee, Certificate
Registrar, Certificate Paying Agent and Paying Agent, the principal corporate
trust office of the Indenture Trustee and Note Registrar at which at any
particular time its corporate trust business shall be administered, which office
at the date of the execution of this instrument is located at
______________________________, Attention:__________. With respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Owner Trust Agreement is located at
_________________________.
Credit Scores: The figure assigned to a Loan that is designed to assess the
Mortgagor's credit history which is obtained from credit reports provided by
various credit reporting organizations and obtained by many lenders in
connection with Loan applications to help assess a Xxxxxxxxx's creditworthiness.
Current Interest: For any Payment Date, the amount of interest accruing at
the applicable Note Interest Rate on the related Class Principal Balance as
applicable, during the related Accrual Period.
Custodial Account: The account or accounts created and maintained by the
Servicer pursuant to Section 3.02(b) of the Servicing Agreement, in which the
Servicer shall deposit or cause to be deposited certain amounts in respect of
the Loans.
Custodial Agreement: Any Custodial Agreement between a Custodian, the
Indenture Trustee, the Issuer and the Servicer relating to the custody of the
Loans and the Related Documents.
Custodian: [Name of Custodian].
Cut-off Date: __________ 1, ____.
Cut-off Date Loan Balance: With respect to any Loan, the unpaid principal
balance thereof as of the close of business on the Business Day immediately
prior to the Cut-off Date.
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Default: Any occurrence which is or with notice or the lapse of time or
both would become an Event of Default.
Deficient Valuation: With respect to any Loan, a reduction in the scheduled
Monthly Payment for such Loan by a court of competent jurisdiction in a
proceeding under the Bankruptcy Code, except such a reduction constituting a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Deferred Amount: For any Class of Subordinate Notes and Payment Date, will
equal the amount by which (x) the aggregate of the Applied Loss Amounts
previously applied in reduction of the Class Principal Balance thereof exceeds
(y) the aggregate of amounts previously paid in reimbursement thereof.
Definitive Notes: The meaning specified in Section 4.06 of the Indenture.
Deleted Loan: A Loan replaced or to be replaced with an Eligible Substitute
Loan pursuant to Section 3.1(c) of the Loan Purchase Agreement.
Delinquency Rate: For any month will be, the fraction, expressed as a
percentage, the numerator of which is the aggregate outstanding note balance of
all loans 60 or more days delinquent as of the close of business on the last day
of such month, and the denominator of which is the Aggregate Loan Balance as of
the close of business on the last day of such month.
Depositor: Nomura Asset Acceptance Corporation, or its successor in
interest.
Depository or Depository Agency: The Depository Trust Company or a
successor appointed by the Indenture Trustee with the approval of the Depositor.
Any successor to the Depository shall be an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and the
regulations of the Securities and Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.
Determination Date: With respect to any Payment Date, the 15th day of the
month in which such Payment Date occurs or if such day is not a Business Day,
the next succeeding Business Day. Due Date: The date on which the Monthly
Payment on the related Loan is due in accordance with the terms of the related
Mortgage Note.
Eligible Account: An account that is any of the following: (i) maintained
with a depository institution the debt obligations of which have been rated by
each Rating Agency in its highest short-term rating available, or (ii) an
account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, provided that any deposits not so
insured shall, to the extent acceptable to each Rating Agency, as evidenced in
writing, be maintained such that (as evidenced by an Opinion of Counsel
delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee
have a claim with respect to the funds in such account or a perfected first
security interest against any collateral (which shall be limited to Permitted
Investments)
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securing such funds that is superior to claims of any other depositors or
creditors of the depository institution with which such account is maintained,
or (iii) a trust account or accounts maintained in the corporate trust division
of the Indenture Trustee, or (v) an account or accounts of a depository
institution acceptable to each Rating Agency (as evidenced in writing by each
Rating Agency that use of any such account as the Custodial Account or the
Payment Account will not reduce the rating assigned to any of the Securities by
such Rating Agency below the lower of the thencurrent rating or the rating
assigned to such Securities as of the Closing Date by such Rating Agency).
Eligible Substitute Loan: A Loan substituted by the Seller for a Deleted
Loan which must, on the date of such substitution, as confirmed in an Officer's
Certificate delivered to the Indenture Trustee, (i) have an outstanding
principal balance, after deduction of the principal portion of the monthly
payment due in the month of substitution (or in the case of a substitution of
more than one Loan for a Deleted Loan, an aggregate outstanding principal
balance, after such deduction), not in excess of the outstanding principal
balance of the Deleted Loan (the amount of any shortfall to be deposited by the
Seller in the Custodial Account in the month of substitution); (ii) comply with
each representation and warranty set forth in Annex B to the Loan Purchase
Agreement; (iii) have a Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate of the Deleted Loan as of the date of
substitution; (iv) have a Combined Loan-to-Value Ratio at the time of
substitution no higher than that of the Deleted Loan at the time of
substitution; (v) have a remaining term to stated maturity not greater than (and
not more than one year less than) that of the Deleted Loan; (vi) be ineligible
for inclusion in a real estate mortgage investment conduit ("REMIC") (a "REMIC
Ineligible Loan") if the Deleted Loan was a REMIC Ineligible Loan (because (a)
the value of the real property securing the Deleted Loan was not at least equal
to eighty percent of the adjusted issue price of such loan at the time of
origination, calculated by subtracting the amount of any liens that are senior
to such loan and a proportionate amount of any lien of equal priority from the
value of such property when the Deleted Loan was originated and (b)
substantially all of the proceeds of the Deleted Loan were not used to acquire,
improve or protect an interest in the real property securing such loan and such
real property was the only security for such Deleted Loan); and (vii) not be 30
days or more delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to the Indenture, any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the failure to pay the Current Interest on any Payment Date;
(ii) the failure by the issuer on the final maturity date to reduce the
Class Principal Balances of any Note then outstanding to zero;
(iii) there occurs a default in the observance or performance of any
negative covenant, covenant or agreement of the Issuer made in the Indenture, or
any representation or warranty of the Issuer made in the Indenture or in any
certificate, note or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the time
when
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the same shall have been made which has a material adverse effect on
Securityholders, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such representation or warranty
was incorrect shall not have been eliminated or otherwise cured, for a period of
30 days after there shall have been given, by registered or certified mail, to
the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee
by the Holders of at least 25% of the outstanding Note Balance of the Notes, a
written notice specifying such default or incorrect representation or warranty
and requiring it to be remedied and stating that such notice is a notice of
default hereunder; or
(iv) there occurs the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust Estate,
or ordering the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(v) there occurs the commencement by the Issuer of a voluntary case under
any applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an order
for relief in an involuntary case under any such law, or the consent by the
Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer or
for any substantial part of the assets of the Trust Estate, or the making by the
Issuer of any general assignment for the benefit of creditors, or the failure by
the Issuer generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing.
Event of Liquidation: Following the occurrence of an Event of Default under
the Indenture, as evidenced by a written notice provided to the Owner Trustee,
the Depositor and the Issuer that all conditions precedent to the sale or other
liquidation of the Trust Estate pursuant to Section 5.04 of the Indenture have
been satisfied.
Event of Servicer Termination: With respect to the Servicing Agreement, a
Servicing Default as defined in Section 7.01 of the Servicing Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FHLMC: The Federal Loan Mortgage Corporation, or any successor thereto.
Final Maturity Date: ____________.
Final Scheduled Payment Date: ______________.
FNMA: The Federal National Mortgage Association, or any successor thereto.
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Foreclosure Profit: With respect to a Liquidated Loan, the amount, if any,
by which (i) the aggregate of its Net Liquidation Proceeds exceeds (ii) the
related Loan Balance (plus accrued and unpaid interest thereon at the applicable
Mortgage Rate from the date interest was last paid through the date of receipt
of the final Liquidation Proceeds) of such Liquidated Loan immediately prior to
the final recovery of its Liquidation Proceeds.
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release, convey,
assign, transfer, create, and xxxxx x xxxx upon and a security interest in and
right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
Holder: Any of the Noteholders or Certificateholders.
HUD: The United States Department of Housing and Urban Development and any
successor thereto.
Indemnified Party: The meaning specified in Section 7.02 of the Owner Trust
Agreement.
Indenture: The indenture dated as of _________________ between the Issuer,
as debtor, and the Indenture Trustee, as indenture trustee.
Indenture Trustee: [Name of Indenture Trustee], and its successors and
assigns or any successor indenture trustee appointed pursuant to the terms of
the Indenture.
Independent: When used with respect to any specified Person, the Person (i)
is in fact independent of the Issuer, any other obligor on the Notes, the
Sellers, the Issuer, the Depositor and any Affiliate of any of the foregoing
Persons, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Sellers,
the Issuer, the Depositor or any Affiliate of any of the foregoing Persons and
(iii) is not connected with the Issuer, any such other obligor, the Seller, the
Depositor or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
Independent Certificate: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
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Initial Note Balance: With respect to the Class A Notes $ ___________, the
Class M-1 Notes $ _________, the Class M-2 Notes $ __________, the Class B-1
Notes $_________ and the Class B-2 Notes $ __________.
Insolvency Event: With respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law, or the consent by
such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture Trustee shall have notice)
of its inability to pay its debts generally, or the adoption by the Board of
Directors or managing member of such Person of a resolution which authorizes
action by such Person in furtherance of any of the foregoing.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any insurance
policy covering a Loan which are required to be remitted to the Servicer, or
amounts required to be paid by the Servicer pursuant to the next to last
sentence of Section 3.04 of the Servicing Agreement, net of any component
thereof (i) covering any expenses incurred by or on behalf of the Servicer in
connection with obtaining such proceeds, (ii) that is applied to the restoration
or repair of the related Mortgaged Property, (iii) released to the Mortgagor in
accordance with the Servicer's normal servicing procedures or (iv) required to
be paid to any holder of a mortgage senior to such Loan
Interest Remittance Amount: With respect to any Payment Date, the sum of
the following:
(i) all interest collected (other than Payaheads) in respect of Scheduled
Payments on the loans during the related Collection Period, the interest portion
of Xxxxxxxxx previously received and intended for application in the related
Collection Period and the interest portion of all prepayments received on the
loans during the related Prepayment Period, less (x) the Servicing Fees with
respect to such loans and (y) amounts due to the Servicer or the Indenture
Trustee with respect to such loans, to the extent allocable to interest,
(ii) the portion of any Substitution Amount or purchase price paid with
respect to such loans during the related Collection Period allocable to interest
and the interest portion of the Termination Price paid in connection with any
optional purchase of the Loans by the Servicer; and
(iii) all Net Liquidation Proceeds and any other recoveries (net of any
servicing expenses, to the extent allocable to interest, and unpaid Servicing
Fees) collected with respect to the loans during the related Collection Period,
to the extent allocable to interest.
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Issuer, Owner Trust or Trust: The ______ Trust Series ____-__, a Delaware
statutory trust, or its successor in interest.
Issuer Request: A written order or request signed in the name of the Issuer
by any one of its Authorized Officers and delivered to the Indenture Trustee.
LIBOR: On each LIBOR Rate Adjustment Date, LIBOR shall be established by
the Indenture Trustee and as to any Accrual Period, LIBOR will equal the rate
for United States dollar deposits for one month which appears on the Dow Xxxxx
Telerate Screen Page 3750 as of 11:00 A.M., London time, on that LIBOR Rate
Adjustment Date. Dow Xxxxx Telerate Screen Page 3750 means the display
designated as page 3750 on the Telerate Service or any other page as may replace
page 3750 on that service for the purpose of displaying London interbank offered
rates of major banks. If the rate does not appear on that page or any other page
as may replace that page on that service, or if the service is no longer
offered, any other service for displaying LIBOR or comparable rates as may be
selected by the Indenture Trustee after consultation with the Servicer, the rate
will be the Reference Bank Rate.
The Reference Bank Rate will be determined on the basis of the rates at
which deposits in the 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 Indenture Trustee after consultation with the
Servicer. The Reference Bank Rate will be determined as of 11:00 A M , London
time, on the LIBOR Rate Adjustment Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the Class
Principal Balance of the Class A Notes. The Indenture Trustee will request the
principal London office of each of the reference banks to provide a quotation of
its rate. If at least two quotations are provided, the rate will be the
arithmetic mean of the quotations. If on that date fewer than two quotations are
provided as requested, the rate will be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Indenture Trustee
after consultation with the Servicer, as of 11:00 A M , New York City time, on
that date for loans in U S Dollars to leading European banks for a period of one
month in amounts approximately equal to the Class Principal Balance of the Class
A Notes. If no quotations can be obtained, the rate will be LIBOR for the prior
Payment Date; provided however, if, under the priorities listed previously in
this paragraph, LIBOR for a Payment Date would be based on LIBOR for the
previous Payment Date for the third consecutive Payment Date, the Indenture
Trustee after consultation with the Servicer, shall select an alternative
comparable index over which the Indenture Trustee has no control, used for
determining one-month Eurodollar lending rates that is calculated and published
or otherwise made available by an independent party. LIBOR business day means
any day other than (a) a Saturday or a Sunday or (b) a day on which banking
institutions in the city of London, England or New York, New York are required
or authorized by law to be closed.
The establishment of LIBOR by the Indenture Trustee and the Indenture
Trustee's subsequent calculation of the Note Interest Rate applicable to the
Class A, Class M-2 and Class B-1 Notes for the relevant Accrual Period, in the
absence of manifest error, will be final and binding.
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LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the city of London, England or New York,
New York are required or authorized by law to be closed.
LIBOR Rate Adjustment Date: With respect to the first Payment Date, the
second LIBOR Business Day preceding the Closing Date, and thereafter, the second
LIBOR Business Day preceding each Payment Date.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
Liquidated Loan: With respect to any Payment Date, any Loan in respect of
which the Servicer has determined, in accordance with the servicing procedures
specified in the Servicing Agreement, as of the end of the related Collection
Period that substantially all Liquidation Proceeds which it reasonably expects
to recover, if any, with respect to the disposition of the related REO have been
recovered. In addition, the Servicer will treat any Loan that is 180 days or
more delinquent as having been finally liquidated.
Loans: At any time, the Loans that have been sold by the Seller under the
Loan Purchase Agreement, together with the Related Documents, and that remain
subject to the terms thereof.
Loan File: The file containing the Related Documents pertaining to a
particular Loan and any additional documents required to be added to the Loan
File pursuant to the Loan Purchase Agreements or the Servicing Agreement.
Loan Purchase Agreement: The loan purchase agreement dated ______________
between [Name of Seller] as assignor and [___________] as assignee.
Loan Rate: With respect to any Loan and any day, the per annum rate of
interest set forth in the related Mortgage Note.
Loan Schedule: The initial schedule of Loans as of the Cut-off Date set
forth in Exhibit A of the Servicing Agreement, which schedule sets forth as to
each Loan, among other things:
(i) the Loan identifying number ("LOAN #");
(ii) the street address of the Mortgaged Property including state, city and
zip code ("ADDRESS");
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(iii) the maturity of the Mortgage Note ("MATURITY DATE");
(iv) the Loan Rate ("CUR RATE");
(v) the Principal Balance at origination ("ORG AMT");
(vi) the type of property securing the Mortgage Note ("PROPERTY TYPE");
(vii) the appraised value ("APPRSL");
(viii) the initial scheduled monthly payment of principal, if any, and
interest ("ORIGINAL P & I");
(ix) the Cut-off Date Loan Balance ("CUT-OFF BAL");
(x) the Combined Loan-to-Value Ratio at origination ("CLTV");
(xi) the date of the Mortgage Note ("NOTE DATE");
(xii) the original term to maturity of the Loan ("ORIGINAL TERM");
(xiii) under the column "OCCP CODE," a code indicating whether the Loan is
secured by a non-owner occupied residence;
(xiv) the Principal Balance of any Loan senior thereto ("SR BAL");
(xv) the Credit Score ("CR SCORE");
(xvi) the debt to income ratio ("DTI");
(xvii) product code ("PRODUCT CODE");
(xviii) loan purpose ("PURPOSE"); and
(xix) the lien position of the related Mortgage ("LIEN").
Such schedule may consist of multiple reports that collectively set forth all of
the information required.
Lost Note Affidavit: With respect to any Loan as to which the original
Mortgage Note has been permanently lost or destroyed and has not been replaced,
an affidavit from the related Seller certifying that the original Mortgage Note
has been lost, misplaced or destroyed (together with a copy of the related
Mortgage Note).
Maximum Interest Rate: ___% per annum with respect to the Class A Notes;
___% with respect to the Class M-2 Notes and ___% with respect to the Class B-1
Notes.
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Monthly Excess Cashflow: For any Payment Date, an amount equal to the
portion of the Remittance Amount, if any, remaining after the payments of
interest and principal under Sections 3.05(b) (c) and (d) of the Indenture.
Monthly Payment: With respect to any Loan and any Due Date, the payment of
principal and interest due thereon in accordance with the amortization schedule
at the time applicable thereto (after adjustment, if any, for partial Principal
Prepayments and for Deficient Valuations occurring prior to such Due Date but
before any adjustment to such amortization schedule by reason of any bankruptcy,
other than a Deficient Valuation, or similar proceeding or any moratorium or
similar waiver or grace period).
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first,
second or third lien on an estate in fee simple interest in real property
securing a Loan.
Mortgage File: The file containing the Related Documents pertaining to a
particular Loan and any additional documents required to be additional documents
required to be added to the Mortgage File pursuant to the Loan Purchase
Agreement or the Servicing Agreement.
Mortgage Note: With respect to a Loan, the mortgage note pursuant to which
the related mortgagor agrees to pay the indebtedness evidenced thereby and
secured by the related Mortgage as modified or amended.
Mortgaged Property: The underlying property, including real property and
improvements thereon, securing a Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
National Housing Act: The National Housing Act of 1934, as amended.
Net Delinquency Amount: With respect to any Payment Date, the excess, if
any, of (x) the product of 3.20 and the Rolling Six-Month Delinquency Average
over (y) the aggregate of the Monthly Excess Cashflow for the three immediately
preceding Payments Dates.
Net Funds Cap: For any Payment Date, will be the annual rate equal to (a )
a fraction, expressed as a percentage, the numerator of which is the product of
(1) the Optimal Interest Remittance Amount for such date and (2) 12, and the
denominator of which is the Class Principal Balance of all of the notes
immediately prior to such Payment Date, multiplied by (b) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the immediately preceding Accrual Period for the Class A, Class M-2 and
Class B-1 Notes.
Net Liquidation Proceeds: All amounts, net of unreimbursed and reasonable
out-of-pocket expenses received and retained in connection with the liquidation
of defaulted loans, through insurance or condemnation proceedings, by
foreclosure or otherwise, together with any net proceeds
AA-14
received on a monthly basis with respect to any properties acquired on behalf of
the noteholders by foreclosure or deed in lieu of foreclosure.
Net Loan Rate: With respect to any Loan and any day, the related Mortgage
Rate less the sum of the related Servicing Fee Rate.
Non-United States Person: Any Person other than a United States Person.
Note Interest Rate: For the Class A Notes, a rate per annum equal to the
least of (i) LIBOR plus ____%; (ii) the Net Funds Cap for that Payment Date and
(iii) the Maximum Note Interest Rate.
For the Class M-1 Notes, a rate per annum equal ____%.
For the Class M-2 Notes, a rate per annum equal to the least of (i) LIBOR
plus ____%, (ii) the Net Funds Cap for that Payment Date and (iii) the Maximum
Note Interest Rate.
For the Class B-1 Notes, a rate per annum equal to the least of (i) LIBOR
plus ____%, (ii) the Net Funds Cap for that Payment Date and (iii) the Maximum
Note Interest Rate.
For the Class B-2 Notes, a rate per annum equal to _____%, subject to the
Available Funds Cap for that Payment Date.
Note Margin: With respect to the Class A Notes, ____% per annum. With
respect to the Class M-1 Notes, ____% per annum. With respect to the Class B-1
Notes, ____% per annum.
Note Owner: The Beneficial Owner of a Note.
Note Register: The register maintained by the Note Registrar in which the
Note Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.
Noteholder: The Person in whose name a Note is registered in the Note
Register, except that, any Note registered in the name of the Depositor, the
Issuer or the Indenture Trustee or any Affiliate of any of them shall be deemed
not to be outstanding and the registered holder will not be considered a
Noteholder or holder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Owner Trust
Agreement provided that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that the Indenture Trustee or the Owner
Trustee knows to be so owned shall be so disregarded. Owners of Notes that have
been pledged in good faith may be regarded as Holders if the pledgee establishes
to the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes or any Affiliate of any of the
foregoing Persons.
Notes: The Notes issued and outstanding at any time pursuant to the
Indenture.
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Officer's Certificate: With respect to the Servicer, a certificate signed
by the President, Managing Director, a Director, a Vice President or an
Assistant Vice President, of the Servicer and delivered to the Indenture
Trustee. With respect to the Issuer, a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer or the Servicer.
Opinion of Counsel: A written opinion of counsel. Any Opinion of Counsel
for the Servicer may be provided by in-house counsel for the Servicer if
reasonably acceptable to the Indenture Trustee and the Rating Agencies or
counsel for the Depositor, as the case may be.
Optimal Interest Remittance Amount: For any Payment Date will be equal to
the excess of (i) the product of (1)(x) the weighted average of the rates of the
loans as of the first day of the related Collection Period less the Servicing
Fee Rate, divided by (y) 12 and (2) the Aggregate Loan Balance for the
immediately preceding Payment Date, over (ii) any expenses that reduce the
Interest Remittance Amount that did not arise as a result of a default or
delinquency of the loans.
Optional Termination: The right of the Servicer to purchase the Loans after
the aggregate Principal Balance of the Loans as of the end of the related
Collection Period is equal to or less than 10% of the Cut-off Date Balance,
pursuant to Section 8.08 of the Servicing Agreement.
Optional Termination Date: The Payment Date on which the Servicer exercises
its Optional Termination Right.
Original Trust Agreement: The Owner Trust Agreement, dated as of
_______________, between the Owner Trustee and the Depositor.
Outstanding: With respect to the Notes, as of the date of determination,
all Notes theretofore executed, authenticated and delivered under this Indenture
except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the
Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been
executed, authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are held
by a holder in due course.
Outstanding Loan: As to any Payment Date, a Loan which was not (i) the
subject of a Principal Prepayment in full during any preceding Collection
Period, (ii) purchased, deleted or substituted for during any preceding
Collection Period pursuant to the Servicing Agreement or (iii) a Liquidated Loan
during any preceding Collection Period as of such Payment Date.
Overcollateralization Amount: For any Payment Date will be equal to the
amount, if any, by which (x) the Aggregate Loan Balance for such Payment Date
exceeds (y) the aggregate Class Principal Balance of all of the Notes after
giving effect to payments on such Payment Date.
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Overcollateralization Deficiency: For any Payment Date will be equal to the
amount, if any, by which (x) the Targeted Overcollateralization Amount for such
Payment Date exceeds (y) the Overcollateralization Amount for such Payment Date,
calculated for this purpose after giving effect to the reduction on such Payment
Date of the aggregate Class Principal Balance of the Notes resulting from the
payment of the Principal Payment Amount on such Payment Date, but prior to
allocation of any Applied Loss Amount on such Payment Date.
Overcollateralization Release Amount: For any Payment Date will be equal to
the lesser of (x) the Principal Remittance Amount for such Payment Date and (y)
the amount, if any, by which (1) the Overcollateralization Amount for such date,
calculated for this purpose on the basis of the assumption that 100% of the
aggregate of the Principal Remittance Amount for such date is applied on such
date in reduction of the aggregate of the Class Principal Balances of the notes,
exceeds (2) the Targeted Overcollateralization Amount for such date.
Owner Trust: ______ Trust Series ____-__, created by the Certificate of
Trust pursuant to the Owner Trust Agreement and the Original Trust Agreement.
Owner Trust Agreement: The Amended and Restated Owner Trust Agreement,
dated as of ______________, between the Owner Trustee and the Depositor.
Owner Trustee: [Name of Owner Trustee], not in its individual capacity but
solely as Owner Trustee of the Trust, and its successors and assigns or any
successor owner trustee appointed pursuant to the terms of the Owner Trust
Agreement.
Owner Trust Estate: The corpus of the Issuer created by the Owner Trust
Agreement which consists of the Loans.
Payahead: Any Scheduled Payment intended by the related mortgagor to be
applied in a Collection Period subsequent to the Collection Period in which such
payment was received.
Paying Agent: (i) With respect to the Indenture, any paying agent or
co-paying agent appointed pursuant to Section 3.03 of the Indenture, which
initially shall be the Indenture Trustee.
Payment Account: The account established by the Indenture Trustee pursuant
to Section 8.02 of the Indenture and Section 5.01 of the Servicing Agreement.
Amounts deposited in the Payment Account will be distributed by the Indenture
Trustee in accordance with Section 3.05 of the Indenture.
Payment Date: The 25th day of each month, or if such day is not a Business
Day, then the next Business Day.
Percentage Interest: With respect to any Note, the percentage obtained by
dividing the Note Balance of such Note by the aggregate of the Note Balances of
all Notes of the same Class.
Permitted Investments: One or more of the following:
AA-17
(i) obligations of or guaranteed as to principal and interest by the United
States or any agency or instrumentality thereof when such obligations are backed
by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i) maturing
not more than one month from the date of acquisition thereof, provided that the
unsecured obligations of the party agreeing to repurchase such obligations are
at the time rated by each Rating Agency in its highest short-term rating
available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining maturity of
more than 30 days) denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the United States or
any state thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard &
Poor's, in the case of the principal depository institution in a depository
institution holding company, debt obligations of the depository institution
holding company) at the date of acquisition thereof have been rated by each
Rating Agency in its highest short-term rating available; and provided further
that, if the only Rating Agency is Standard & Poor's and if the depository or
trust company is a principal subsidiary of a bank holding company and the debt
obligations of such subsidiary are not separately rated, the applicable rating
shall be that of the bank holding company; and, provided further that, if the
original maturity of such shortterm obligations of a domestic branch of a
foreign depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of Standard &
Poor's if Standard & Poor's is the Rating Agency;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United States or any
state thereof which on the date of acquisition has been rated by each Rating
Agency in its highest short-term rating available; provided that such commercial
paper shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each Rating
Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not reduce the rating
assigned to any Securities by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Securities as of the Closing
Date by such Rating Agency, as evidenced in writing, provided that if the
Servicer or any other Person controlled by the Servicer is the issuer or the
obligor of any obligation or security described in this clause (vi) such
obligation or security must have an interest rate or yield that is fixed or is
variable based on an objective index that is not affected by the rate or amount
of losses on the Loans;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right
AA-18
to receive both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with respect
to such instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations References herein to the highest
rating available on unsecured long-term debt shall mean AAA (or the equivalent
in the case of Xxxxx'x), and references herein to the highest rating available
on unsecured commercial paper and short-term debt obligations shall mean A-1 (or
the equivalent in the case of Xxxxx'x).
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Physical Note: Any note issued in fully registered, certificated form. The
initial Physical Notes shall be the Class B-2 Notes.
Predecessor Note: With respect to any particular Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 4.03 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
Prepayment Assumption: __% CPR.
Prepayment Period: For any Payment Date, the calendar month preceding that
Payment Date.
Principal Balance: For any Loan as of any Determination Date, is equal to
its outstanding principal balance as of the Cut-off Date, reduced by the
principal received on or before the Due Date in the Collection Period
immediately preceding such Determination Date.
Principal Prepayment: Any payment of principal made by the Mortgagor on a
Loan which is received in advance of its scheduled Due Date and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Principal Payment Amount: For any Payment Date will be equal to the
Principal Remittance Amount for such date minus the Overcollateralization
Release Amount, if any, for such date.
Principal Remittance Amount: For any Payment Date will be equal to the sum
of (1) all Principal collected (other than Payaheads) in respect of Scheduled
Payments on the Loans during the related Collection Period (less amounts due to
the Servicer and the Indenture Trustee with respect to the Loans, to the extent
allocable to Principal) and the Principal portion of Payaheads previously
received and intended for application in the related Collection Period, (2) all
Principal Prepayments received during the related Prepayment Period, (3) the
outstanding principal balance of each Loan that was repurchased by the Seller or
the Servicer during the related Collection Period and the principal portion of
the Termination Price paid in connection with any optional purchase of the Loans
by the Servicer, (4) the portion of any Substitution Amount paid with respect to
any replaced Loans during the related Collection Period allocable to Principal
and (5) all Net Liquidation
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Proceeds and any other recoveries (net of any Servicing Expenses, to the extent
allocable to Principal) collected with respect to the Loans during the related
Collection Period, to the extent allocable to Principal.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Purchase Price: The meaning specified in Section 2.2(a) of the Loan
Purchase Agreements.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as an insurer
by the Servicer and as a FNMA-approved mortgage insurer.
Rating Agency: Any nationally recognized statistical rating organization,
or its successor, that rated the Securities at the request of the Depositor at
the time of the initial issuance of the Securities. Initially, Xxxxx'x or S&P.
If such organization or a successor is no longer in existence, "Rating Agency"
shall be such nationally recognized statistical rating organization, or other
comparable Person, designated by the Depositor, notice of which designation
shall be given to the Indenture Trustee. References herein to the highest short
term unsecured rating category of a Rating Agency shall mean A-1+ or better in
the case of S&P and P-1 or better in the case of Xxxxx'x and in the case of any
other Rating Agency shall mean such equivalent ratings. References herein to the
highest long-term rating category of a Rating Agency shall mean "AAA" in the
case of S&P and "Aaa" in the case of Xxxxx'x and in the case of any other Rating
Agency, such equivalent rating.
Realized Loss: With respect to each Liquidated Loan, an amount (not less
than zero) equal to (i) the Principal Balance of the Loan as of the date the
Loan becomes a Liquidated Loan, plus (ii) interest at the Net Loan Rate from the
Due Date as to which interest was last paid to Noteholders up to the last day of
the month in which the Loan becomes a Liquidated Loan on the Principal Balance
of such Loan outstanding during each Collection Period that such interest was
not paid, minus (iii) the proceeds, if any, received during the month in which
such Loan becomes a Liquidated Loan, to the extent applied as recoveries of
interest at the Net Loan Rate and to principal of the Loan, net of the portion
thereof reimbursable to the Servicer or any Subservicer with respect to related
expenses as to which the Servicer or Subservicer is entitled to reimbursement
thereunder but which have not been previously reimbursed.
Record Date: With respect to the Notes and any Payment Date, the Business
Day next preceding such Payment Date and with respect to the Certificate and any
Payment Date, the last Business Day of the month preceding the month of such
Payment Date.
Reference Bank Rate: With respect to any Interest Period, as follows: the
arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth of
a percent) of the offered rates for United States dollar deposits for one month
which are offered by the Reference Banks as of 11:00 A.M., London, England time,
on the second LIBOR Business Day prior to the first day of such Interest Period
to prime banks in the London interbank market for a period of one month in
amounts
AA-20
approximately equal to the sum of the outstanding Note Principal Balance of the
Class A Notes; provided that at least such Reference Banks provide such rate. If
fewer than two offered rates appear, the Reference Bank Rate will be the
arithmetic mean of the rates quoted by one or more major banks in New York City,
selected by the Indenture Trustee after consultation with the Servicer, as of
11:00 a.m., New York time, on such date for loans in U.S. Dollars to leading
European Banks for a period of one month in amounts approximately equal to the
aggregate outstanding Principal Balance of the Class A Notes. If no such
quotations can be obtained, the Reference Bank Rate shall be the Reference Bank
Rate applicable to the preceding Interest Period.
Reference Banks: Barclays Bank PLC, National Westminster Bank and Bankers
Trust Company.
Registered Holder: The Person in whose name a Note is registered in the
Note Register on the applicable Record Date.
Related Documents: With respect to each Loan, the documents specified in
Section 2.1(c) of the Loan Purchase Agreement and any documents required to be
added to such documents pursuant to the Loan Purchase Agreement, or the
Servicing Agreement.
Release Agreement: A Release Agreement as defined in Section 3.02 of the
Servicing Agreement.
Remittance Amount: The sum of the Interest Remittance Amount and the Principal
Remittance Amount.
REO: A Mortgaged Property that is acquired by the Issuer in foreclosure or
by deed in lieu of foreclosure.
Repurchase Price: With respect to any Loan required to be repurchased on
any date pursuant to the Loan Purchase Agreement or purchased by the Servicer
pursuant to the Servicing Agreement, an amount equal to the sum of (i) 100% of
the Loan Balance thereof (without reduction for any amounts charged off) and
(ii) unpaid accrued interest at the Mortgage Rate (or with respect to the last
day of the month in the month of repurchase, the Mortgage Rate will be the
Mortgage Rate in effect as to second to last day in such month) on the
outstanding principal balance thereof from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month of
purchase.
Responsible Officer: With respect to the Indenture Trustee, any officer of
the Indenture Trustee with direct responsibility for the administration of the
Owner Trust Agreement and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
Rolling Six Month Delinquency Average: For any Payment Date will be the
fraction, expressed as a percentage, equal to the average of the Delinquency
Rates for each of the six (or one through five, in the case of the first through
fifth Payment Dates) immediately preceding months.
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Scheduled Payment: For any Loan, the monthly scheduled payment of interest
and principal, as determined in accordance with the provisions of the related
mortgage note.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Securityholder or Holder: Any Noteholder or a Certificateholder.
Seller: [Name of Seller].
Senior Enhancement Percentage: For any Payment Date will be the fraction,
expressed as a percentage, the numerator of which is the sum of the Class
Principal Balance of the Class M-1, Class M-2, Class B-1 and Class B-2 Notes and
the Overcollateralization Amount (which, for purposes of this definition only,
shall not be less than zero), in each case after giving effect to payments on
such Payment Date, and the denominator of which is the Aggregate Loan Balance
for such Payment Date.
Senior Principal Payment Amount: For any Payment Date on or after the
Stepdown Date with respect to such Payment Date, will be the amount, if any, by
which (x) the Principal Balance of the Senior Notes immediately prior to such
Payment Date exceeds (y) the lesser of (A) the product of (i) approximately
____% and (ii) the Aggregate Loan Balance for such Payment Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Payment Date
exceeds (ii) ____% of the Aggregate Loan Balance as of the Cut-off Date.
Servicer: [Name of Servicer], a ____________ corporation, and its
successors and assigns.
Servicing Agreement: The Servicing Agreement dated as of ___________ 1,
____ among the Issuer, the Servicer and the Indenture Trustee.
Servicing Certificate: A certificate completed and executed by a Servicing
Officer on behalf of the Servicer in accordance with Section 4.01 of the
Servicing Agreement.
Servicing Default: The meaning specified in Section 7.01 of the Servicing
Agreement.
Servicing Fee: With respect to any Loan and any Collection Period, the
product of (i) the Servicing Fee Rate divided by 12 and (ii) the Loan Balance of
such Loan as of the first day of such Collection Period.
Servicing Fee Rate: With respect to any Loan, ____% per annum.
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Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Loans whose name and specimen
signature appear on a list of servicing officers furnished to the Indenture
Trustee by the Servicer, as such list may be amended from time to time.
Single Note: A Note in the amount of $1,000.
Six-Month Rolling Delinquency Average: With respect to each Payment Date,
the average of the Sixty-Day Delinquency Amounts for each of the six immediately
preceding Collection Periods.
Sixty-Day Delinquency Amount: With respect to any Collection Period, an
amount equal to the aggregate Principal Balance of the Loans that are sixty or
more days delinquent in payment of principal and interest at the end of the
Collection Period.
Standard & Poor's: Standard & Poor's Ratings Services or its successor in
interest.
Stated Value: With respect to any Loan, the value of the related Mortgaged
Property as stated by the related Mortgagor in his or her application.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del. Codess.ss.3801 et seq., as the same may be amended from time to time.
Stepdown Date: For any Payment Date, the later to occur of (x) the Payment
Date occurring in ____________ and (y) the first Payment Date on which the
Senior Enhancement Percentage, calculated for this purpose only after taking
into account payments of principal on the Loans, but prior to any payment of the
Principal Payment Amount to the notes then entitled to payments of principal on
that Payment Date, is greater than or equal to _____%.
Subordinate Notes: The Class M-1, Class M-2, Class B-1 and Class B-2 Notes.
Subservicer: Any Person with whom the Servicer has entered into a
Subservicing Agreement as a Subservicer by the Servicer.
Subservicing Account: An Eligible Account established or maintained by a
Subservicer as provided for in Section 3.02(c) of the Servicing Agreement.
Subservicing Agreement: Any written contract between the Servicer and any
Subservicer relating to servicing and administration of certain Loans as
provided in Section 3.01 of the Servicing Agreement.
Subservicing Fee: With respect to any Collection Period, any fee retained
monthly by the Subservicer which will be paid out of the Servicing Fee.
Substitution Amount: The amount, if any, by which the Principal Balance of
a Loan required to be removed from the trust due to a breach of a representation
and warranty or defective
AA-23
documentation exceeds the Principal Balance of the related substitute loan, plus
unpaid interest accrued thereon.
Targeted Overcollateralization Amount: For any Payment Date prior to the
Stepdown Date, the greater of (i) ____% of the Aggregate Loan Balance as of the
Cut-off Date or (ii) the Net Delinquency Amount. With respect to any Payment
Date on or after the Stepdown Date, the greatest of (a) _____% of the Aggregate
Loan Balance for such Payment Date, (b) the Net Delinquency Amount or (c) ____%
of the Aggregate Loan Balance as of the Cut-off Date.
Termination Price: With respect to the Optional Termination, an amount
equal to the greater of (i) the sum of the Aggregate Loan Balance and accrued
and unpaid interest thereon at the weighted average of the Net Loan Rates
through the day preceding the Payment Date on which such purchase occurs and
(ii) the sum of (a) the aggregate Note Principal Balance of the Notes
immediately prior to the Payment Date on which such purchase occurs, (b) the
aggregate of any Applied Loss Amounts on the Notes remaining unpaid immediately
prior to the Payment Date on which such purchase occurs, (c) the aggregate of
the Current Interest on the Notes for the Payment Date on which such purchase
occurs, and (d) the aggregate of any Carryforward Interest on the Notes for the
Payment Date on which such purchase occurs.
Treasury Regulations: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
Trustee Additional Expenses: All reasonable expenses and disbursements
incurred or made by the Indenture Trustee or the Administrator in accordance
with any of the provisions of the Indenture or the Administration Agreement with
respect to: (A) the reasonable compensation and the expenses and disbursements
of its counsel not associated with the closing of the issuance of the Notes, (B)
the reasonable compensation, expenses and disbursements of any accountant,
engineer or appraiser that is not regularly employed by the Indenture Trustee or
the Administrator, to the extent that the Indenture Trustee or the Administrator
must engage such persons to perform acts or services hereunder, (C) printing and
engraving expenses in connection with preparing any Definitive Notes and (D) any
other reasonable expenses incurred other than in the ordinary course of its
business by the Indenture Trustee or the Administrator in connection with its
duties hereunder. Trust Estate: The meaning specified in the Granting Clause of
the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform Single
Attestation Program for Mortgage Bankers, as published by the Mortgage Bankers
Association of America and effective with respect to fiscal periods ending on or
after December 15, 1995.
AA-24
United States Person: A citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States or any State thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations).
AA-25
